Media Dojo

Archive for the ‘New Advertising Models’ Category

I signed away part of my summer yesterday. I’ll be diving into a hard-core research project on consumer media in the cloud for GigaOm Pro. It’s the kitchen sink: music, video, games, apps, docs—all wrapped in social, mobile and cloudy stuff.

After I plow through the more or less standard set-up: cloud media definition, examples, driving forces, roadblocks, who’s up and who’s down; it’ll be time to get to the more interesting questions in my opinion. To wit, who will own the interoperability of media across services, which is the best business (handling Big Data or handling meta-data?), privacy/anti-trust. Bottom line I think is that media strategy is no longer about using the web for a destination as much as using it for distribution to a boatload of devices, contexts and business models.

Anyway, that’s the raw thinking one day in. Ping me with some ideas or contacts at john.gauntt <at> media-dojo.com.

I’ve been sketching an outline for my next report for GigaOm Pro on cloud computing and consumer media. I’ll give a head’s up on the final version when it’s done late this month or early this month. So this thinking is still raw.

My nose tells me that the recent tiffs between Apple/FLASH, Google TV/CATV, Facebook/everyone else is indicative of a larger trend. It seems like the professional media industry is starting to say, “we’ve given this information wants to be free stuff a good 15 year run on the web. To show for it, we’ve been gutted. Going forward, we’d rather cut a deal with a Cupertino/Mountain View/Redmond devil and get a slice of a real pie.” I know this doesn’t sit well with the John Perry Barlow crowd. But then again, he had made his money being chef to the Grateful Dead before he got all cyber libertarian.

Being a media snob, I’ve been looking hard to find the multi-billion $ media content company that launched on the web. I’m still waiting. The market cap went to technology and aggregation plays, not a new media experience. To a large degree, it’s the incumbent media industry’s fault. Jeff Jarvis is tedious with his standard schtick about old media’s problems. But it doesn’t make him any less wrong. The fact is that the revolution came and instead of devouring its young, it feasted on print publishing and music. It’s licking its chops over video. That’s been the steady cycle for 15 years.

But going forward, there’s not a hell of a lot of analog transmutation left. Either the media industry (however owned) needs to start working the revenue side of the ledger with truly new experiences in storytelling, or it can continue feeding off the corpse of the old world and cede the ground to the Googles of the world entirely.

Enter cloud computing. Sure, the initial advantage rests with the technologists and device guys. But the difference this time is that the same technology DOES allow a media content start-up to scale linearly should it manage to capture lightning in a bottle. The first green shoots are being found in transmedia properties, especially the next generation ones like we’re seeing with my friend Brent Friedman’s Valemont franchise. Brent doesn’t base his business anymore just on selling copies of the story or restricting access to it. The story has become a world in which the audience can dwell and participate; a world that provides multiple avenues for monetization; and a world in which competitive advantage involves how fast and how well Brent or his users can customize the experience at the margin. Mass customization trumps mass distribution in this scenario.

This tells me that control over the *context* of a media experience is becoming more important than control over the media itself. The range of devices, situations (e.g. location awareness), and business models has bumped complexity to a level to where a cloud-based platform would be the only one flexible and scalable enough to handle it. Fundamentally, the cloud makes media itself more intelligent. In a hard media (e.g. CD/DVD) or standard web (non-mobile, non-social) world, the media player and UI was all you needed because the media was stupid. All it needed to do was PLAY. Now, media must integrate with social identity, physical location, a preferred device, a specific service plan and a configurable bundle of rights for the consumer.

It’s a switch from a ROM-based media world to a RAM-based media world. That makes RUN the most important command.

That’s today’s take. As I dig deeper and start interviewing people to create this research, I’ll no doubt do some ADD/DROP to the meme. Naturally, comments/suggestions/pointers are most appreciated.

Flying out tomorrow for Osaka and Kyoto. Kids are old enough now to where they need to see cousins and get in touch with their other culture.

In the meantime, I’ve started the next piece of research, which will look at how we build APIs into branded content franchises and where the cloud might fit in. I spent the morning with Brent Friedman, founder of Electric Farm Entertainment. His latest transmedia series Valemont has been running live on MTV for some months now. It’s pulled in serious backing through Verizon and others. I can’t go into a lot of the data stats just yet but the upshot is that the Internet and, by extension, the cloud have become the ultimate IP incubators for storytelling.

We did a 2hr brain dump for notes for my flight. Should get a shorter piece out during the May/June timeframe. Contact me if you’ve got any pointers related to transmedia and the cloud.

Next month will see me in San Francisco to address a hard-core geek audience at the Emerging Communications Conference about what it might mean to build an API into a branded content or marketing franchise. Some of the first baby steps are being taken by information publishers like Guardian and NPR. Developers can bake an app that executes an API call to permitted content feeds as part of its feature set. I think it’s going to get a hell of a lot more interesting in an iPad world. Here’s the basic gist:

STORY AS SOFTWARE: Transmedia storytelling is hot in both Hollywood and Madison Avenue. The success of franchises such as Heroes, Afterworld, and Valemont has proven the value of extending narrative across many platforms to create multiple doorways for end-users to enter and engage with a story. The next stage of transmedia storytelling will pair narrative extensions with functionality extensions to open up completely new user experiences and business models for producers, distributors and marketers. Recent deals between content providers like Bravo with location-based players like Foursquare, in which Bravo branded content is made part of the Foursquare experience is indicative of a larger trend of integrating function with media experiences. This talk will explore some of the examples of new marriages of form and function in media, with special emphasis on the operational and technology challenges needed to pull it off. Drill downs will focus on mobile augmented reality, handling the data challenge, as well as integrating audience input into the evolution of a branded content franchise. For developers, there is no better time to think about what it means to build an API into a content franchise.

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.

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.

Hope everyone had a good new year….back online with mobile and cloud computing posts.

I’m kicking off the new year with the mobile AR report for GigaOm Pro. This was a bear because the sector remains very raw, with the first consumer applications having launched only in the past year—barely. Right now, the action in the sector revolves around getting better location accuracy as well as improving the performance of mobile AR browsers for iPhone, Android and certain flavors of Symbian and WinMo. Make no mistake, mobile AR is another battle between Apple and Google for real estate. In the case of mobile AR, the ultimate real estate play is in the location data and metadata that can be annotated with media, advertisements, maps and host of other digital bling.

My personal opinion on mobile AR? Very experimental and raw so make sure that whatever media or marketing budget you put into it is clearly marked EXPERIMENTAL. That said, if mobile AR pops as a consumer app, it will have a huge effect on mobile search because it obviates a lot of need for keywords and other parts of the fixed web we’re trying to shoehorn into mobile. Small wonder then that the Android universe and Google are looking very close at mobile AR. We’ll know a lot more by summer. In the meantime, I want to thank the mobile AR interviews for this piece including Layar, Metaio, Mobilizy and Zehnder. Keep an eye on these guys.

The report is over at GigaOm Pro.

Here’s the official summary:

Mobile augmented reality (AR) brings computer-generated multimedia into an end-user’s literal field of vision. It merges real-time digital information with the user’s perceptions of his or her immediate physical surroundings. The mobile AR user simultaneously experiences physical reality and digital media consumption. This report looks at the growing mobile AR ecosystem, from the technologies and trends supporting its development to the applications, players, and business models driving innovation. The report includes a forecast for the number of mobile AR–capable devices, summarizes existing revenue forecasts for the nascent market, and leverages three in-depth case studies to demonstrate the intersections between markets, technologies, and companies in emerging applications.

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 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.