Media Dojo

Archive for the ‘Media and Marketing Industry’ Category

I know you’ve read ad nauseum about the upcoming Guide to Cloud Computing for Media People. Well, scratch the “upcoming” part.  It’s done and dusted. Time to let loose an excerpt of the demon child that’s ruled my free time (what little there is) since November.

Media Dojo Cloud Computing Guide Excerpt

This excerpt is about 1/4 of a 60+ page whitepaper. The Preface, Foreward and Table of Contents should give you a decent map of the work.

I’m releasing this under Creative Commons to spark a conversation in the technology, media and marketing industries about cloud computing—the good, the bad and the ugly. That said, I’m not just throwing this thing out in the wild. If you’re interested in the full version, you need to send me an email to get a conversation started.

john.gauntt <AT> media-dojo.com

My goal with this work is to launch a new think tank focusing on the intersection of media, technology and marketing. I need all the help I can get.

It can’t be a bad day when you close a $25 million round.

YuMe, a video advertising technology player, announced a third round of funding today. Led by Menlo Ventures and featuring its original clutch of investors (Khosla Ventures, Accel, BV Capital, DAG Ventures), a round this size in a difficult economy is solid validation that online video advertising has gone mainstream.

I caught up with Jayant Kadambi, co-founder and President of YuMe, just before they made their announcement. For a quick overview of the company, check out the Media Dojo Tear Sheet–YuMe.

Media Dojo: YuMe has been in the online video space since 2004, which makes you almost a senior citizen. How have the conversations you’ve had with publishers and advertisers about online video monetization evolved over time?

Jayant Kadambi: We started in late 2004, pre-YouTube. In one of our early pitches we characterized ourselves as a company at the intersection of Silicon Valley, Madison Avenue and Bollywood. In 2005 and 2006 we built a video ad platform in order to handle the monetization of video as it spread across web sites and live streaming, HD downloads, smartphones and iPhones, apps, IPTV, Roku boxes, and so forth. Basically, you needed a SaaS type platform to manage all of that complexity from the monetization perspective. So we spent two years working on the ad platform. And then we got a little lucky because YouTube just took off near the end of 2005. All of a sudden people were writing about how video was cool and people were migrating from old to new media. At the same time in 2005/2006, almost none of the big TV advertisers seemed interested in moving beyond getting their feet wet with online video. By 2007/2008, there were people running experiments and there were a lot of questions you might recall about whether pre-rolls were the right ad format, whether they were a nuisance or a necessity. People didn’t know what ad formats to use and what would be the best. There were no standards and so forth. In 2009, we saw people dive in with both feet. From last year, we got scale on both the publisher and the advertiser side. If you look at our video ad metrics reports over the past few months, it’s all TV advertisers buying audiences and trying to reach them efficiently at scale online.

MD: What surprised you along the way?

JK: The cool thing about the stretch from 2004-2009 is that when you look back in time at advertising spending from big advertisers since the 60s, it pretty much matches the advertising spending online that we have on page two of our latest report. The top spending categories remain auto, CPG, entertainment—-more or less the same ad guys are diving into the new medium as they were when soap operas first showed up.

MD: What about this year? Do you see a shift in video publisher and advertiser attitudes?

JK: The emphasis in 2010 is revolving around conversion. We’re seeing that the big brands advertising on TV are looking to advertise the same way online. They’re trying to reach their audiences on safe, well lit, premium content. Instead display and search people looking for clicks/ROI and performance based stuff, the brand guys are looking for contextual relevancy. In online video, they’re looking to reach 18-43 year males who watch a set of dramas to where you know the user behavior because you observed them watch bunch of videos. So the conversation we’re having with the media sales guys are what audience do you want to reach? It’s no longer an issue of explaining online video or why it’s cool. And the conversations we have on the publisher side is that publishers want to take their video, convert it into different formats and get it everywhere. They want to increase their user base. And when they increase that footprint, they want to know if they can monetize it on the iPhone, Android or a Roku Box. Brands and publishers have no problem going transmedia when they believe that the aggregation of content is safe.

MD: So, an alternate definition of “premium content” is that it’s immunized against porn, spam, racist or similar stuff. A publisher’s video site has a shot record to show brands so to speak…

JK: Exactly. That’s why Hulu does well. Everyone knows that Hulu has three types of content. ABC, NBC, and Fox. They know there’s no porn mixed in. Historically, ad networks for brands have had an oily reputation. We have been very careful to cultivate an image of being a short form version of Hulu. We’ve aggregated a set of premium content. It’s safe. And you don’t care as an advertiser where you are included because you know it won’t embarrass you. There’s a cogent argument to say that the recession has accelerated a flight of brand money from print, TV, and display to online video. It’s not a bad place to be when the tide is rising.

MD: Let’s talk new online video ad formats. Until recently, choosing among pre-rolls, post-rolls and overlays was about as appetizing as choosing from the chicken, the fish or the veggie on a cross-country flight. How are you adding more interactivity and performance to video ads?

JK: Last month, we launched something called Triple Play. Basically, it’s about adding different calls-to-action after the pre-roll runs. For example, the viewer can be presented with the opportunity to watch additional videos, learn more about a product, sign–up for promotional offers, or even visit a brand’s Facebook fan page. We are pitching Triple Play to ad agencies wanting to do certain things in video ad units that will show to their clients that there is activity and engagement by the user. If you follow the news, you hear the line “we only want to pay when there’s engagement” or we want to know how much the customer is engaged etc. The cool thing is that there’s a mouse, there’s video and you can have the user do things if it makes sense. You can poll them. Give them free stickers, win a prize or a lot of stuff based on the technical nature of video sitting in that player. Triple play gives the agency the ability to dive into it afterward. It’s good for the studios in that after you’ve seen a 15 sec trailer, you can click on a 2min version and go watch it. We’re using Triple Play and a clutch of over 20 video ad formats to put the advertisement in a video player in front of the customer after they’ve clicked on it and indicated, “yes I want to watch the video”. This is in contrast to putting that video ad in a banner below the fold on autoplay that you often see in a lot of display media.

MD: What’s your business model?

JK: We make money two ways. We take ad $ from the agencies and the brands. It’s a standard ad network model in that sense. We take a percent and spread the rest across our publishers according to the goals of the campaign. For the hosted app software, the model is license based. The video ad management and serving platform is called ACE . The video ad management is licensed according to a cost per impression basis or we barter it for inventory. We have a flexible model to where the publisher or agency picks what they want. If they want to pay us $10K per month for unlimited serving, they’re welcome to do that. Once people get really big, they like that kind of deal.

MD: Last question, what’s your crystal ball for the online video ad business in 2010?

JK: There’s no silver bullet video format out there if that’s what you mean. We regularly put out video ad metrics reports to show both publishers and brands what’s working and what doesn’t work. Our general attitude toward both sides regarding ad formats is they will know best what will work for a campaign and what their customers needs are. Run whatever you want and let’s go see what works. And what works may be different from client to client. Kids respond differently to different ad units than adults. The cool thing about online video is that we can give finely granulated targeting to the customer that then documents the performance of an ad unit. Over time we may figure out that power rolls may work better for people who watch sports while Triple Play works better for entertainment trailers. We won’t make sweeping statements because we think this stuff is complicated. The reason media is fragmenting isn’t 100% because of new devices. It’s fragmenting because people will make different choices under different circumstances.

I arrived in Munich last night after an exhausting/exhilarating week in London. Two presentations about media futures to Associated Northcliffe Digital and A&N Media put me through the paces. Associated NorthCliffe Digital connects with 40% of the UK population through a portfolio of  240+ premium websites whilst A&N Media reaches 60% of the population across print, online, TV and mobile. Hands down, there is no better training than to present your ideas in front of a small audience (25 for one meeting and 7 at another) with serious responsibility over outcomes. Both audiences were tough but fair in their questions and comments. I can’t go into data/specifics of the presos because of confidentiality agreements but the remit was to explore a media world in which demand chains ruled supply chains and in which media had become a platform game rather than a publish and distribute game. I hope to drill further into those twin memes with some other clients on the idea of coming out with public research and data later this year.

In the meantime, it’s Welkommen Deutschland! First time I’ve been to Germany. My hosts are Hubert Burda Media, which is one of Germany’s largest diversified media groups. I’m attending their invite-only Digital, Life and Design (DLD) get-together. It’s the first time I’ve attended. Expect some posts in the coming days…

Mobile app stores are in the midst of an algae bloom. Gartner is throwing out (throwing up?) numbers suggesting 4.5 billion downloads in 2010, $6.2 billion in global revenue, and 82% of all apps being free to the consumer. A multi-billion $ paid market off 18% of the available inventory would get most anyone hot under the collar.

That said, the new opportunities have created nearly as many headaches. Remember the giant pain in the ass just to format mobile content for multiple devices? Well, you can blow that figure up by several orders of magnitude once you kick in all the new engagement models with various calls-to-action. Then, think about the various app store policies for uploading, approval and distribution. Make no mistake. This is a much better world than the days when deck placement made or broke companies. At the same time, we’re playing for real money now.

We spoke with Goldspot Media, one of the newer players out there trying to bring some order to the app store chaos on behalf of creatives in publishing and marketing shops. Goldspot offers a web-based drag and drop studio called miApp that enables that fabled write once/distribute everywhere on any device for any app store. For the one-pager on Goldspot’s corporate vital stats, check out the MD Tear Sheet_Goldspot Media.

I caught up with Srini Dharmaji, Goldspot’s founder and CEO, just before taking off for Europe to talk about how this model plays out in the realm of mobile video advertising.

Media Dojo: What’s the end-game for Goldspot Media?

Srini Dharmaji: What we are trying to take to market is a video ad network for mobile applications, focusing strictly on mobile apps across the board for smartphone platforms. Our main objective is to enable mobile applications to do more than just work on display oriented mobile content pages. We are launching an ad network that is focused on delivering in-app mobile video advertisements.

MD: How does this work in practice?

SD: The idea is that so far video adverts were being rendered only as video content. The ad is spliced into the content stream in whatever sequence the publisher and marketer agree. This is part of the paradigm of manipulating pages of content but it does very little to add to the experience of a mobile video application. We’ve come up with some mobile app native formats, such as that the video ad will play while the application is starting up. So while the page is loading the video ad is overlaid on top. The app publisher might also split some of the screen real estate in which part of it is used to render the ad while the video application is displaying the content or asking the user to take some kind of action. The key thing here is how well and fast you render the mobile video ad.

MD: Staying on the business side before we dive under the hood, how are you taking this to market?

SD: Publishers, brands and agency creatives join the video advertising network and part of that includes access to the drag and drop design studio called miApp. We give them a set of APIs that unlocks the interactive assets they want to add to their original video content. The content originators then use the studio to add pre/post/mid rolls, in-stream ads, shrink & surround ads, overlays, animated Gifs, ad bugs and so forth to their source content. The two points to remember is that A.) control over everything from concept to deployment can stay with the creative person and B.) once they’ve decided on what they want, they can one-click deploy to any smartphone device across all app stores.

MD: Fair enough, now let’s talk performance. How do you make your video ads work better than what’s on offer from the usual suspects like an Admob or Millenial Media?

SD: The difference is that the big ad networks stream the video ads from the network. We place the ads on the device using what we call opportunistic downloads. So when the device is connected to Wi-Fi for example, we download all the campaigns that are running for the month. So that ads are sitting on the device ready to go. If you look at the latency improvement by using this method and our APIs, by the time an Admob video ad is rendered by Tap Tap or some other mobile video game, you need to wait between 10-15 sec depending on the bandwidth. In the time it takes for Admob to pull the stream from the cloud, Goldspot will have already played the ad.

If you look at it from a marketing standpoint, the big networks are taking a high quality video ad from a brand and re-encoding it to play for different bit rates depending on whether the device is tuned for an EDGE, 3G or Wi-Fi network. I’m not sure if I’m a brand and I’ve just spent many tens of thousands on creating that high quality video ad that I want a technology limitation to butcher the quality of my ad. That is something we believe is a big negative as far as rendering ads as it’s done today.

MD: For the moment, let’s take the secular growth of mobile media and advertising as given, where will the new markets and new devices arise?

SD: Rather than talk about specific devices, let’s look at the more broad use case in which you have networked devices which aren’t mobile phones. If you think about something like iPod Touch, which has sold many more units than iPhone, it’s not always in contact with a Wi-Fi network. Chances are the demographic playing the game might be a good candidate for an advertiser but s/he’s not connected to the network. What do you do? Because we’re able to render and download adverts to pre-cache them on the device while connected to Wi-Fi, we can then show the adverts when the user is offline. There are already some standards brewing for offline decoding on the advertising content for networked devices that deal with sporadic connectivity. We think that’s a major growth area.

MD: Certainly a lot of moving parts. Last question then. How do you define success?

SD: All the publishers care about is show me the money. All the brands care about is show me the engagement. You’re dealing with two different animals here. The way I define success is make the whole ecosystem happy and sustainable.

I’m in London and Munich over the next couple of weeks. London is a special pleasure as my wife and I lived here for four years during the early 90s. Our daughter was born in St. Marys hospital in Paddington.

Things are very busy now…aside from the Mobile Augmented Reality work done for GigaOm Pro, this coming Monday (18 Jan), I’m scheduled for 90min in front of the 25 or so managing directors of Associated Northcliffe Digital to talk about secular shifts in consumer media markets caused by convergence. AND is the largest premium website publisher in the UK, with about 1/3 of the adult population checking in as uniques each month. It’s been a hell of a task to work on a preso up to that level. I appreciate the confidence of Richard Titus and Dan Taylor to let a humble researcher comme moi arrive at the start of a 2 day executive away meeting to stir up the pot. After the presentation, I’ll re-work some of the material for posting here.

I’m also finishing off the Media Dojo Cloud Computing for Media opus during this week in London. It will weigh in about 65-70 pages and will include four scenarios about the media world in 2020 plus a technical overview of cloud computing specifically targeted to media and marketing professionals. I’m working with Laura Urban Perry, a Seattle-based designer to insure that the visual layout is congruent with what I hope to say. That damn Avatar movie has raised the bar for all of us.

Of course, no trip to London would be complete without dropping in on my old martial art training buddies. So if I get a fetching shiner above or below an eye, I’ll be sure to post a picture.

Following London will be Deutschland…my first time. I’m going to Munich to attend the DLD Conference. The speaker line up is world class and it’s got a similar vibe as the Monaco Media Forum in being invitation-only, small crowd, low key and high powered—just the way I like it.

Expect some posts and interviews over the coming days as these events fall into line…for right now, however, I’m going to crack a beer and watch Hulu…9+ hours in British Airways can do that to a person.

Been a busy Monday. The first clutch of media invites has arrived in time for Christmas.

First up is DLD (Digital, Life and Design). This is the big gig thrown by Burda Media in Munich about 2 days before the World Economic Forum kicks off in Davos in late Jan 2010. Burda is Germany’s largest diversified media company. DLD hosts about 700 or so invite-only attendees from around the world at the intersection of creative, technology and media. I knew some of the DLD crew from adventures at the Monaco Media Forum. They haven’t yet put out the full program but thus far the line up includes Marissa Mayer from Google, Nokia’s Tero Ojanpera, Jason Kilar from Hulu, and Own Van Natta from MySpace. Not sure if I’ll be involved yet. But it was a nice early present to get an invitation.

Then about two hours later the invite rolled in from the Abu Dhabi Media Summit. This one takes place March 9-11 at the Yas Hotel in Abu Dhabi. This is a pretty tight event for about 400 people focusing on emerging media markets in Middle East, South Asia, India and China. I’ll probably have a hand in doing some editorial programming for the mobile sections. The co-chairs for this first event are truly world-class: Rupert Murdoch from News Corp., Tim Armstrong from AOL, Kai Fu-Lee (formerly Google’s top China person) from Innovation Works, Sunil Bharti Mittal from India’s Bharti conglomerate, and several others. Given the stakes involved with emerging market media, the networking is likely to be outstanding. Besides, the Yas Hotel has both a marina and a Formula 1 track. Given the likely jet-lag I’ll have, I hope the windows sound proof the vroom.

As exciting as these events are, they also remind me that in recession wracked America, some of the most important media and digital media deals are happening outside our shores. In one sense, it’s a natural evolution. But I’m racking up horrible travel miles because the only real business is overseas right now.

It’s been crazy the last few months of 2009 in terms of travel and projects.

Monaco Media Forum was a huge success, yet one that sucked up massive amounts of bandwidth before and during the event. Superb speakers and networking. I don’t know if I’m cut out to be an editorial programmer in the long run but having the experience of doing it at this level of intensity was great. Hopefully, I’ll be able to announce participation to help program a major event on emerging media economies over the next few weeks. Stay tuned.

After Europe, I took a DEEP dive into mobile augmented reality for GigaOm Pro. That one should publish later this month or after the beginning of the year. I’m going to start 2010 with a series of posts about mobile AR here at Media Dojo and on Mediabizbloggers, which is part of Jack Myers site. I’ve already done my first post there. Also during November/December, I pitched and scored a presentation gig in the olde country for one of the UK’s largest digital publishers. It’s a small heavy hitting audience of 25 managing directors with serious budgets and a bad case of WTF is going to happen in media and marketing during 2010. We’ve got 90min together so it’s not a quick and dirty PPT but real deal analysis of media’s flip to a mass customized business and what that means.

Of course, there’s the ever pressing Media Dojo Guide to Cloud Computing for Media and Marketing, which will publish near the end of January 2010 or early February.

And then, to top it off, I’ve entered the Pacific NorthWest Indoor Rowing championships for January 30, which means about 40,000+ meters on the indoor rower each week.

In order to balance out all that industriousness, I’ve penciled in a proper 2 day drunk during February to coincide with the Superbowl.

It’s my fourth year going to Monte Carlo for the Monaco Media Forum. The MMF is an invitation-only get together of about 350 digierati from the media and marketing worlds. Groupe Publicis (the number 4 advertising holding company but number 1 in digital revenue) and HSH Prince Albert II are the main patrons, along with Microsoft, Lenovo, Orange, Google (YouTube) and Booz & Co. I’ve helped with the agenda for a couple of years now. There will be a special panel on media clouds that will include Media Dojo alum Sean Knapp from Ooyala among others. At the event, I’ll launch the MD Guide to Cloud Computing for Media and Marketing. The Guide will be a first stop for business layer media and marketing professionals who need to get a handle on the foundation concepts, tech, companies, and impact of cloud computing on their industry.

If you’re interested in attending, drop a line at

contact@monacomediaforum.org

to request an invite. If accepted, you’ll pay for air travel and hotel with all the ground costs picked up by the organizers.

Busy Monday, people. The research I did for GigaOm Pro on mobile cloud computing published today. I still need to negotiate with them what kind of excerpt I can put on this site….he who pays the piper calls the tune and all that. Aside from feeding my naked self-interest, you need to check out a subscription to GigaOm Pro. It’s one of the best deals out there and should strike terror into the hearts of other research shops.

Online video is huge in terms of users. Online video is more huge in terms of usage.

So where’s the money?

That seems to be a standard story line these days in both general press and on blogs. Everyone spouts off about whether online video will overtake TV, when and how. The inserted bias to these stories is that online video is a mathematical function of television, as conceived and organized by the television industry. By definition, if the image moves or is animated, it must be either film or television. But that’s a lot like benchmarking an Indy car against horse drawn carriages because both have wheels, need a road or a track, and are used by people for transportation. You can figure where the logic is leading….

So, it was a breath of fresh air for me to speak again with Sean Knapp, co-founder and CTO of Ooyala regarding a new project the video platform service provider is doing with Wheels TV and eBay Motors. For more corporate info on Ooyala, here’s the Media Dojo Tear Sheet–ooyala.

Ooyala is working with Wheels TV to market test POV (pre-owned vehicle) reviews on eBay Motors.  It’s a new, video-based consumer shopping service for people looking for pre-owned vehicles. Each five minute POV video review contains road tests, walk-arounds and data addressing reliability, safety and fuel economy information related to about 200 make/model/year automobiles for sale on the eBay Motors site.  The POV Reviews are produced in cooperation with J. D. Power and Associates.  JDPower.com’s Power Circle ratings suggest trends in overall dependability, performance and quality on every vehicle. POV reviews also include mileage estimates from the Environmental Protection Agency and crash test videos (yeah buddy!!!) from both the Insurance Institute for Highway Safety and the National Highway Transportation Safety Administration.

Naturally, viewers can share the videos across their personal networks.

Here’s some sample videos:

BMW 3 Series

Ford Mustang

Honda Pilot

The primary benefit to the buyer is that video can crunch several hours of research on the make/model of a given automobile into about five minutes. Translated, the videos give the buyer quick, effective talking points for persuading their significant other around the dinner table that it’s the JD Power *safety* rating that makes the BMW 3 Series a smart buy, rather than the kick-ass pick-up and handling, not to mention the fire-engine red color and awesome trim.

I spoke with Sean about how Ooyala is handling the video demand, especially from the viewpoint of analytics.

Media Dojo: What kind of analytics will eBay Motors get with these video streams?

Sean Knapp: They’re basically getting the full suite from us ranging from geographical breakdown, to the unique user base to how many uniques they’re getting on a daily, weekly and monthly basis. They’re also getting behavioral analytics that pinpoint which particular part of the video people watch, what’s the abandonment rate, who’s skipping ahead. Then, they can start looking across video to compare the acquisition/retention curves for the Ford Mustang versus the GMC Envoy on the site. Finally, eBay Motors is using our API to pull in data that they’ll crunch using their proprietary in-house analytics systems.

MD: Are online video analytics going the way of other digital analytics in becoming more performance-based as opposed to just exposure-based?

SK: How we monetize content isn’t based as much on the number of impressions anymore. The issue is that over the next few years there’s going to be a 10-30X increase in overall video content served even though there will be only a 2-3X increase  in the number of viewers. So what users are doing with video becomes the key metric to track as opposed to just who is being exposed to video. What video content are users accessing? How are they consuming that content? How are they responding to advertising?

MD: Granted the need for better analytics, are publishers really becoming more sophisticated about using video?

SK: On average, people are getting more sophisticated on the buy side. Publishers are looking more closely not just at how consumers are consuming their content but how the publishers are monetizing that content. Over the course of the past six to nine months, we’ve gone from supporting  2 or 3 ad networks to supporting 12-15 different ad servers and ad networks plugged in to our platform. Publishers are getting away from saying just “How do I get video into my site” more to “How do I refine the video on my site? Which knobs should I turn to get people to consume it? How do I extract value from that consumption?”

MD: Obviously, eBay Motors has a clean benchmark for monetizing the content (e.g. brokering sales). What about other sites that aren’t squarely in the e-commerce bullseye? What trends are you noticing in terms of their ability to monetize video content?

SK: In terms of monetization, there’s no silver bullet. There’s some value in a video CPM and some value in a CPC. But it all eventually falls under the umbrella of some kind of Cost Per Action. We think the better players will be those who carve up a broader publishing base into finely sliced niches against which people can advertise. Auto is a good category in which there are numerous niches for targeting that can be aggregated into a bigger media buy. But to get to that place, you’re going to need to see the larger video platforms get into closer collaboration with the larger ad networks. Everyone needs to help create a larger media buy ecosystem. To get the best exposure, brands can’t just dip into the top 100 sites of a given category, but need to get into the top 100,000 sites. This means that a lot of mid tier publishers using video will need to offer more sophisticated analytics to get that business but it’s not likely that they’re able to build that in house. That’s where the large video platforms like us come along.

MD: Last question. How much cloud computing horsepower have you added to keep up with demand since we spoke last spring?

SK: We’re seeing anywhere from 30-40% growth on the low end per month to over 100% growth in certain months. It depends on the metric you chose whether it’s GB ingested, video hours served, video users reached. We’ve been able to scale things through good partnerships with our Content Delivery Network (CDN). We also have a very good distributed computing team in house. We built our transcoding and storage applications to site on top of cloud infrastructure from day one. Today when you upload a 2hr length full movie to us, it will hit anywhere from 10-100 different encoding machines operating in parallel. We can now encode a HD quality 2hr movies substantially faster than real time by operating in parallel on cloud infrastructure.