Next New’s Thing: Boosting Ad Revs

Aug 24, 2008  •  Post A Comment

While some question just how much money marketers are pouring into Internet video advertising, Web television network Next New Networks said it’s now pulling in six-figure monthly ad revenue.
NNN, whose co-founders include former MTV Networks Vice Chairman Herb Scannell and interactive media professional Tim Shey, also has inked deals with at least four new sponsors in the last quarter and has sold out its YouTube inventory for August.
Indy Mogul on YouTube
NNN has raised $23 million in venture funding since its March 2007 launch, so its revenue numbers indicate the well-funded online video firm isn’t just burning through cash. In fact, NNN expects to reach profitability next year, Mr. Shey said.
Other online video networks like ManiaTV, which has taken in $26 million in venture money, also are targeting 2009 to be in the black. If these firms pull off profitability, the online video business may quiet some of the lingering doubts that there isn’t enough ad money to go around.
Earlier this month, new-media research firm eMarketer revised its online-video ad spending projections downward by two-thirds, saying advertisers will spend $505 million this year. The firm said the drop resulted from a change in methodology, but that hardly reassured the market.
Some of NNN’ new advertisers include Puma, Microsoft Vista, Universal Studios and Microsoft’s Zune Arts. They join existing advertisers including Lionsgate, Paramount Pictures, Sony Pictures and Spike TV.
NNN is close to selling out its ad inventory on YouTube for September. NNN sells its own ads on YouTube, as do content companies such as CBS. By controlling its ad inventory, NNN sets the rates and controls the content they appear against. NNN averages about 20 million views per month, about half of those from YouTube.
NNN also has implemented technological tools from Castfire and Freewheel that allow for dynamic ad insertion across distribution partners such as YouTube, AOL, Veoh, Yahoo and TiVo. That lets NNN control which spots appear against which videos, and switch the ad content if need be.
That’s especially useful for movie studios. Spots for Universal’s “Death Race,” which opened Aug. 22, appear in current and past episodes of NNN shows, including do-it-yourself visual effects show “Indy Mogul.” Most of the ads are “brought to you by” sponsor bumpers and host mentions that fit more organically into the show.
“You will see a part where [“Indy Mogul” host] Erik Beck says, ‘This was sponsored by “Death Race,”’ and we have dynamically inserted that across all of ‘Indy Mogul,’” Mr. Shey said.
About 25% of monthly views come from past episodes, so now the company is monetizing those views with current ad buys, Mr. Shey said.
NNN regularly talks to the biggest media agencies in the country about its programming, he added. Six-figure deals with advertisers often take as long as six months to finalize.
“We are not competing with Revision3 or For Your Imagination,” he said, referring to Web-video studios. “The competition is to convince advertisers to go with you instead of TV or instead of banner campaigns on Yahoo. I don’t think any advertiser has created a dedicated budget for online video shows, so you can’t really compete with each other for money when the category doesn’t exist yet.”
Given the uncertain U.S. economy, NNN’s progress is a good sign that the video ad business is growing rather than contracting, said analyst Mugs Buckley of the Diffusion Group.


  1. What innovations will transform the online-video ad market beyond its’ being a competitive also-ran alternative to TV and banner campaigns on Yahoo?
    How might engagement advertising foment some of this change?
    What other innovations bear promise?

  2. So last year marketers spent approx. $471 million on online video advertising and this year they are only expected to spend $505 million opposed to an early reported figure north of $1 billion?!
    So the online video advertising market will grow less than 8% this year over last year? eMarketer was way off on this prediction, but they see huge future growth as does everyone else involved in the online industry.
    I guess everything usually takes longer than expected to materialize, and this market is no different. It will be interesting to hear eMarketer’s new projections going forward for online video advertising.

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