Moderator: Jamison Tilsner, Tilzy.TV
TS Kelly, Mediacontacts
Randy Kilgore, Tremor Media
Kevin McGurn, Hulu
Peter Naylor, NBC Universal
Tim Shey, New Next Networks

Do Independent Video Producers Stand a Chance Against the Big Boys?

Tim: NNN is the home of Obama girl, and now McCain girl, which became the #1 video on YouTube within the first 12 hours of its launch. NNN has embraced the idea of super distribution. We’ve embraced as many formats and outlets as possible, while still controlling the advertising and monetization of the content.

Tilz: Could the talent behind IndyMogul (NNN channel) have had the same success on their own?
Tim: There is a certain point in business where things start to get really interesting. We’d been working a bit with lots of the early web video producers. When a video property starts to gain serious traction, they need to ask, “Ok, now what?” So when a lot of people like this all want to do the same thing, there is economy of scale. What we thought about was how not to make the original audiences, that made these shows popular, suffer through the monetization process.

Tilz: How important is the marketing effort in order to gain traction?
Tim: When we first launched, we didn’t care if we got 15k views per month. We wanted organic growth. There is always a way to drive traffic. You can go to Yahoo and turn on the traffic, but then you don’t know if you really have something good. Once we establish that the content is good, we can go out and do deals around them.

Kevin: Hulu starts mostly with professionally produced content that already has an audience. But for other content, we use what our editors think is cool, and also what is popular on the site. They aren’t always the same. We want to make video as viral as possible. If you think your friends would like a video, we want you to be able to share it. Things on the web don’t have to be an instant success. In fact, they generally aren’t, unless they were popular somewhere else first.

Tilz: I noticed that Hulu has adopted some of the made for web content. DadLabs, Abigale’s Teenage Diary, for example.

Kevin: All of our content is professionally produced, and high quality. Hulu is a high resolution, high quality player, which is a barrier to entry for a lot of user generated content. Hulu is going to be the biggest aggregator of professionally produced content. Video can be shot on a small budget, but still have quality.

Tilz: How do you see a fragmented market as an ad agency?

TS: Size matters. Sometimes it’s the motion of the ocean. It’s the motion for the smaller producers. We look at a lot of data to figure out what is working. We educate, test, and prove performance. We have to mesh all of this data together to figure it all out, but in the end, its about getting people into stores and buying product. Our job is to be able to interpret data for our clients. In the past it was a lot easier. There is a tremendous need for analytics.

Randy: If TV is the goliath, we are all Davids right now.

TS: I don’t need to worry about aggregating content, and don’t look at video in isolation. I just need to prove it worked. I look at the relationship of video and search, video and display.

Randy: The other goliath is the unknown. We want to shed light on it, but it is hard right now. The time, effort and innovation is what will allow us to ‘slay the monster.’

Peter: It is very difficult to compare the web and TV. Its not squares and squares. Its squares and circles. You’ve got evergreen content on the web. You can take all these clips and aggregate them into niche networks. But the content was used one way in one medium, and is used differently on the web.

Tilz: NBC and Hulu are selling ads across their entire library?
Peter & Kevin: Yes.

Tilz: What stops you from using all the data that TS describes?

Kevin: We are using it. We are doing a crawl, walk, run approach. But we have demographic data, and profiling data, and targeting data, and can share that with buyers to help them plan. The agencies are tasked with marrying that to the adserver data that they have. But you have a heightened level of information that you can’t get anywhere else. With Dynamic Logic and Insight Express, you can add even more data to help plan your next campaign.

Peter: Networks have only really been streaming shows for 24 months. Our advertisers get the first look at the data we gather on how people are consuming the content.

TS: There is a level of expectation for accountability for how things work online. We are presenting results to our clients in multiple forms. We use ecommerce data. We use whatever we have to show that a campaign works. Advertisers are now coming to us to help them produce content. Its like the 50s all over again.

Tilz: Jeff Zucker said he wants to avoid going to niche. That seems at odds with some of the current content producers.
Peter: He was talking specifically about broadcast. When he is talking about broadcast, he’s talking about creating “tentpole” events that people gather around. When it comes to niche content, look at some of our investments. We’ve invested in DriverTV, which is for automotive shoppers. We have an investment for pet owners. So overall, we are placing bets everywhere – broad and niche.

Tilz: What should be the definitive success metric?
TS: Sales. There are so many moving parts.

Randy: You really need to be consultative. You need to do a lot of the blocking and tackling. But each client has their own set of success metrics, and that is what is critical to us. But that is also what makes it difficult to do one-offs.

Kevin: There isn’t a standard across the board. Your ad opportunities vary based on the content. People need to back off of engagement. What you choose to do with an ad impression is up to the client. Understand your audience, see which ones are performing the best, and optimize. We’ve got both brand and direct response metrics to measure and work with.

Tim: As a programming company, we are relying on a lot of the people on the stage to figure that out. We can’t focus on developing the next behavioral targeting technology. But we need to get on board with some metric as an industry just so we can all have a conversation around a common metric. In the meantime, we sell a lot of sponsorships and integrate our sponsors very organically.

Q&A:
Lloyd Truffelman, Trylon: What can we learn about the “inversion” that we were talking about earlier. People sit down to “see what is on TV.” How are we going to find content?
Kevin: It is about the individual, and a network of trusted friend, trusted sources. And then you look at what those networks are doing. Personalized platforms. But we need “one number” across all platforms that allows us to measure all of this. We’re going to need to find a common language.

Tim: We are still betting on brands. Even as blogging was taking apart the publishing industry, there were plenty of outlets popping up to become your brand that you trust to help you find the content you love. Brands haven’t gone away, they are just evolving in the way they communicate with people.

Randy: It is exciting now that there are so many people creating content for the digital space. But it is not going to stay that way for ever. The big guns, people that can make things happen, are getting involved. CAA was at the Digital NewFront presentation. There will always be some opportunity to be innovative and get yourself known, but that opportunity will shrink.

Tim: There is great stuff out there. We need to bring the content from the end of the tail and push it up to the head. That’s what Hulu is doing with recommending content.

- Moderator: Jamison Tilsner, Tilzy.TV
- Jim Lauderback, Revision3
- Herb Scannel, NextNewNetworks
- Alex Blum, KickApps

Tilz: For most video producers, its still a passion project, but starting to see it as a medium that is attractive to advertisers.

Herb, NNN: Creates micro-niche networks.

Alex: KickApps is a technology provider. Makes it easy for everyone to introduce video on their sites, wrapped with a full suite of social media experiences. Key to the platform’s capabilities is that developers can access the tools on a self-service basis. Now powering 22,000 sites.

Jim, revision3: internet TV network with 15 different shows. Mostly male 18-35 audience who have abandoned TV as their main form entertainment.

Herb: BarelyPolitical.com is a political satire community that produced the Obama Girl video. Herb showed the follow-up video for Mike Gravel, who apparently is still running for president, doing the SoljaBoy dance. ThreadBanger.com features content for fashion designers and manufacturers, and was able to incorporate some product placement sponsorships for sewing machines. Lastly, IndyMogul is for independent film producers, which Columbia Pictures approached for content integration as well. Hysterical video on the world of illegal underground board game playing. Did you know there was a steroid problem in Hungry Hungry Hippos?

Tilz: How did the content channels develop?
Herb: Three different paths of development. Commissioned a show and built a network around it. IndyMogul began when a friend of an employee sent in a demo. Lastly, Ben Relles did a few videos on Obama Girl, and NNN bought that company and brought them under the NNN umbrella.

We looked at communities that were robust on the internet. With the elections coming up, the political satire space was a natural. For Threadbanger, most of the fashion shows are aimed at high level, high fashion. The sewing machine “sew off’ happened organically. Counted on there being an advertiser base that was endemic to the content, and advertisers that would want to reach the audience. NNN can be bought horizontally and vertically.

Jim, Rev3: We do a lot of things that are similar to NNN, going after niche markets. But we’ve been more focused on longer form programs that people make real time in their schedule to watch. Our roots were around technology, so our early programming was tech based. Built a strong base of programming around that, and then built up to compliment that. Next channel was music, then internet culture, but we don’t see automotive as a niche that we are going into, or at least not going into next. In addition to the content, its all about the talent. DiggNation is popular because of the chemistry between the hosts. “99% of our audience has unaided advertising recall. 48% of our audience has made a purchase.”

Tilz: How do you handle the 3rd party advertising when you syndicate content to other sites like BlipTV?
Jim: The integrated sponsorships travel with the content, but we work with the publishers to provide category exclusivity for our sponsors before we provide the content. So there won’t be a Victoria’s Secret ad when we syndicate content that is sponsored by Body By Venus, for example.

Alex, KickApps: Powered a hip-hop American Idol style contest.. Wyclef Jean picked the ultimate winner. Cingular Wireless paid premium dollars in order to reach that market.

Alex: We spend time with advertisers and agencies to let them know that projects and content like this are pretty easy to create. The costs and time in developing an experience like that today are minimal.

Tilz: Why did Rev3 and NNN choose to develop your own tech instead of using one of the other platforms?
Jim: We’re all HD, and wanted to control the user experience. We are both downloads and streams. Our audience wants DIVX and H264, so we needed much more control.
Herb: We also wanted to control the experience. We work towards being compatible with as many other platforms as possible.

Tilz: How do you ensure that your destination is the premiere destination for watching yoru content, and not your syndication partners?
Herb: We thought that the best way to “birth” brands would be to super-distribute content. We aligned ourselves with a number of partners to make sure we were where our audiences were. While bigger media companies were trying to keep control, we wanted to give our users what they wanted. The website would be the place where people who want a deeper community experience would go. We focused on the communities, rather than the destination.
Alex: There are 3 things that we advise our clients. Syndication, viral syndication through widgets that can be easily snagged by your audience and put it out on your behalf. Then people can use your website for a deeper experience that you can’t provide out there on the web. But it allows your fans to be your best sales people. Many of our clients are seeing as much traffic driven through the widgets as through SEO.

All of our web based tools are made for average web developers, but we’ve got WYSIWYG creation tools.

Jim: We liked having a destination website to expose people to other content in our network, but we understand that it is “anywhere, anytime, any device, any service.” When it comes to video online, you can’t control the experience. Syndication is about discovery. That’s where they’ll find the content. But when they want to join the community, they do that back at our site.

Tilz: how meaningful is the revenue?
Herb: Starting to get more meaningful. YouTube is the iPod of the video business. We’re advocates of the creation of a video syndication marketplace. The video syndication space is a collaborative space. All of us are in the game of building a marketplace.

Tilz: CPMs on your networks and cross distribution platforms?
Jim: Still feeling our way through that. $80-$100 CPMs on sponsorship.
Alex: Clients of ours are seeing extraordinary CPMs for certain verticals like auto and health. In the range of $70-$80. If you’ve created a social media destination, you can learn a lot about your audience. You can use all that information to inform intelligent adserving.

Tilz: Is there a magic threashold?
Herb: We strive to get a million views per month per channel. But some endemic advertisers like the community and will be willing to pay for it because of the depth of interaction and engagement of the community.
Alex: Advertisers need to understand that the niche oriented sites are made up of influencers, and you need to reach them.
Jim: We’ve been very successful with CPA as well. When you pick the right advertiser for the audience, you can do very well with CPA.

Audience: Are CPMs artificially high because of a still growing audience?
Alex: CPMs will go up because of targeting. There will be more experiences availale, but the ad dollars will continue to flood in. We’re continuing to see the migration of ad dollars. The migration of those dollars will create more opportunities.
Jim: If advertisers want to reach your audiences, then you can keep those CPMs high, or even higher. If you made content for CIOs and had 150 of them in a room at any time, you could have $1000 CPMs and be worth it.

Question: Optimizing for search engines? Is SEO as much of a factor with niche video?
Alex: Viral syndication is an alternative to SEO. In many cases, SEO has a small impact on what you are trying to accomplish.
Jim: the challenge across the board is discovery. Super distribution is one way. But 70% of all internet experiences start with a search query. So you can own or create your own “channel” through smart SEO.

Question: Measurement?
Herb: Freewheel provides the opportunity to dynamically insert advertising into your content across your super distribution channels. You can lay over Visible Measures technology and really create a lot of metrics to look at. There are plenty of technology solutions out there. But remember, for 30 years, Nielson data was completely unvalidated.
Jim: Freewheel is becoming the DoubleClick of online video. You can consolidate all of your super distribution into one report.