‘Edgy’ Draws Eyes, Not Ads

Aug 21, 2006  •  Post A Comment

Media agency MPG and its client Comedy Central laid a bet this month in the red-hot world of Web video that echoes decisions many other advertisers are making.

They placed a banner ad for Comedy Central’s upcoming William Shatner roast, “The Shat Hits the Fan,” on the Web site Newvoyages.com, a site that features fan-created “Star Trek” episodes based on the original science-fiction series. Newvoyages.com eschews the kind of viral video content that skirts the edge of propriety. Instead, it offers Comedy Central an environment for ads that’s predictable and has semiprofessionally produced fare.

That choice reflects one of the advertising realities that’s emerging in the Web video world inhabited by YouTube.com, Google Inc., Microsoft Corp.’s MSN, Yahoo! Inc. and others: It’s tough to sell ads against clips of adolescent boys hitting each other with baseball bats.

The Web video sites are finding music videos, movie trailers, sports highlights and news stories are among their most popular offerings. And those offerings have one important thing in common: They’re much easier to sell ads against.

Ad Dollars Crucial

Web video companies that can’t attract ad dollars or partnerships with established media companies are unlikely to generate enough revenue to compete long term. So while YouTube, the No. 1 video site, has generated a lot of light with its viral videos, it may not generate the most heat with advertisers.

Comedy Central placed its Shatner ad on a site with a small, loyal audience rather than a YouTube, which attracts as many as 30 million viewers a month. In doing so, the network avoided having its ad run amid content its target audience might find either boring or off-putting. It also bought itself a little insurance about the quality of the clips the spot runs next to.

“The keys to the kingdom are still in California,” said T.S. Kelly, VP and director of research and insight for Media Contacts, the interactive arm of media agency MPG, which counts Comedy Central as a client. “The most well-produced content is still the most popular.”

Though the floodgates are now open for anyone to create and watch videos, the ones that percolate to the top are still usually the slickest, best-produced material.

“Advertisers need some degree of control,” Mr. Kelly said. “We felt this was a nice middle ground.”

That middle ground for now is the torso in the parlance of Web commerce, where the head represents the most popular material and the so-called long tail represents things that appeal to a small group of devotees.

“It’s the torso of professionally produced content that attracts top advertisers,” said David Eun, VP of content partnerships for Google.

That could be clips from PBS or from museums and academic institutions, he said. In other cases, the most popular content has wider appeal. News clips from MSNBC and NBC play well on MSN, while music videos are tops for both Yahoo and AOL.

Yahoo Video launched in 2004, and Yahoo expects to serve 5 billion streams of music video this year, up from 4 billion last year across Yahoo Music and Yahoo Video, said Jeff Karnes, director of multimedia search for Yahoo.

Later this year, Yahoo Video plans to begin offering pre-roll ads in front of its video content so it can tap into the projected 2006 online video ad revenue of $385 million, a figure that may rise to as much as $640 million in 2007, according to new media research firm eMarketer.

Yahoo already runs graphic and banner ads from blue-chip advertisers on Yahoo Video. Though Yahoo began offering user-generated videos in late May, for now advertisers are ponying up for content that’s safer. Mr. Karnes added that placing ads in front of traditional content is just that: traditional. Advertising in user-generated content is unknown but still worth pursuing, he added.

Like Yahoo, AOL Video counts music videos as its most popular category. In June, AOL Music claimed 19 million unique visitors, according to comScore numbers provided by AOL. The portal offers more than 10,000 music videos. They’re popular because they’re short, available easily from artists who want promotion and fit the demographics for younger Web video audiences, said Fred McIntyre, VP of AOL Video, whose advertisers include Procter & Gamble, Kraft, General Motors, Intel, Unilever and Progressive Insurance.

In time, Mr. McIntyre expects TV programming to be one of the most popular online video categories. TV content has risen in popularity this year and now ranks in the realm of movie trailers in usage, he said.

Like Yahoo and Google, AOL is stepping into user-generated content with its beta test of “UnCut Videos.”

“You are certainly seeing phenomenal growth around user-generated stuff, and there is a whole dynamic there,” Mr. McIntyre said. “But it is tougher to make money in that area. If you go and you talk to the guys buying ads for Procter and Gamble, they won’t be as excited about buying that as they are about buying music videos or news or TV programming. There are just some real risks for their brand.”

Across the Board

That’s why Google Video, for instance, is also placing its bet on comprehensiveness by offering user-generated videos, niche content, music videos and broadcast network shows. While the service hasn’t been a smashing success, the search giant has experimented with a variety of business plans, such as download to own, pay-to-play, ad-supported and syndication via a deal it inked with MTV Networks last week to distribute clips across nearly 300 Web sites.

“We have evolved from having one monetization option to expanding that,” Mr. Eun said. “We see ourselves as a technology partner for content owners … When you look at the consumption curve, it’s extremely flat and extremely long.”

The early success the Internet pioneers like AOL, Google and Yahoo are finding with advertisers and business models speaks to what matters most with online video-having the best business plan.

As for YouTube, its task is to turn the eyeballs it attracts into ad dollars. The business model for user-generated content lies in finding a filter so advertisers can decide whether to put a 30-second video around a two-minute clip or not, said Josh Martin, digital media analyst with iHollywood Forum.

YouTube did not respond to a request for comment.

Last month YouTube said it planned to introduce a new ad system later this year encompassing advertising, promotions, sponsorships, ads related to content on the site, and banner ads.

In yet another indication of the promise held by Web video, Viacom’s MTV Networks late last week agreed to acquire Atom Entertainment, which owns two Internet film and video sites, AtomFilms.com and AddictingClips.com.