Moderator: Steve Smith
Philip Braden, ScanScout
Eric Hadley, CEO, Heavy
Rebecca Paoletti, Yahoo
Chris Allen, Starcom

Panel starts with some show-and-tell.

ScanScout Philip Braden shows overlays. Plays in-stream while the video is playing. From that point on, the ad experience is completely user initiated. New example that Philip showed was a video-in-video overlay. Cool demo alert: There was video playing in the overlay. Lots of potential here.

Eric Hadley, CMO, Heavy.com, shows an example from the Husky Media Network. It is a full page takeover that wraps around the video player. They also have a video guide that can load other syndicated content, and then serve an ad against the syndicated content, which has been pre-vetted for ad friendliness. Essentially, their ad covers up all of the content on a website except the video player. It removes the risk of having your ad seen along side questionable content.

Rebecca starts by asking the room how many people would buy those Heavy skins. Not one hand. Then into the Yahoo pitch. Four different formats, but 90% of their revenue comes from only two of those formats. User is prompted to roll over for more info. When the user does, an overlay appears that can be interacted with. Rebecca says they are seeing 6% CTR on them. A whole 6%. Not a “point-six percent.” She also shows a persistent bug that sits on top of the player that will launch an overlay. Clicking on the subsequent overlay can launch a microsite that sits on top of the player. For each clip, the advertiser gets three opportunities to engage.

Steve: What types of content are these formats good for monetizing? How do they map and match against different types of content?

ScanScout: overlays work across all types of content. They also work great for short form content where you can’t show a pre-roll. You can also contextually target the ads. We have a fair number of publishers that have UGC, and we can filter out undesirable content. The technology is flexible, which allows a brand like Disney to have different standards than Budweiser.

Eric, Heavy: We find that the skins are excellent for monetizing longer form content. We can show multiple ads without asking the user to interrupt their experience. The video guide allows the advertiser to know what content their ads will be next to.

Rebecca: We can serve pre-roll against a lot of our professionally produced content, like sports highlights. Some publishers don’t like overlays because their content is their ‘bread and butter’ and they don’t want it covered.

Philip: We can also put the overlay under the player for publishers who don’t want to cover any of their content.

Steve: Are we effectively monetizing short news clips?
Rebecca: Specific content may not be monetized on purpose. Breaking news, for example. We want users to be able to get a hurricane update immediately, without watching an ad.

Steve: Are these formats making video safer for brands?
Chris: We have two buckets. UGC and not UGC. Most of our advertisers believe they can reach their audience without dipping into the UGC pool. But we still see tons of pre-roll, mainly because its easy. They’ve already created it. We advocate for shorter ads. But you can’t get substantial reach without looking to the portals. We also look at the ad-to-content ratio for a publisher. 4:1 content to ad ratio is probably OK. We’re helping our advertisers understand what they can do with video. Most of them don’t know that you can do lead gen with video.

Steve: What about portability? Is there pushback from publishers or brands that don’t want their ads to follow the content as it is hypersyndicated?
Philip: We integrate our technology so that the ads can travel with the video. But we also want to know where the content has gone before we serve an ad.

Rebecca: Portability was a huge push for our latest ad formats. We wanted to make it easy for our publishers to use. We focused on keeping the interactions within the video player.

Chris: We want see where the content goes before we buy ads. Syndicating content out to social networks is still scary for a lot of advertisers. When we first started talking about syndication of content across the web, we knew it would be huge. Previously we had always applied the value to the content. But we’re finding that there is also a lot of value on the publisher that delivers the content. The CBS Audience Network still gets the majority of their views from CBS.com.

Steve: How well do the formats encourage video use?
Eric: We wanted to be able to monetize the video anywhere, and not force people to watch a pre-roll. When you serve an ad in the middle of a video, you’ve already got the user hooked. You need to get them hooked first. If they back out of the video because of a pre-roll, you lose all the potential ad impressions that would have come after it.

Philip: Its hard to say that any form of advertising encourages viewing. But ads need to be configured in a way so that it doesn’t alienate users.

Rebecca: This is an ongoing debate. I always have people saying “kill the pre-roll.” And we’ll test it, but it never affects the levels of video consumption. Our focus is on the number of videos to ads. On the entertainment side, there is no difference in video consumption regardless of the ad format.

Steve: Video ads are becoming more interactive. It is still interruptive, even if it is up to them. Are people really willing to interact with an ad?

Philip: Engagement in general is good. We are 1%+ CTR on the overlays. But more than half of the people that click on the overlay eventually click through to the destination site.

Erik: We put the interactivity in the skin because it is such a large piece of real estate. Our audience multitasks. They want to watch a bunch of goofy videos, not really paying attention.

Steve: Are we getting to the point where there is confusion in the market about what constitutes a video ad?

Erik: You need to try lots of things.

Chris: People expect new things. They want to be entertained and have fresh new things in front of them while they are surfing the web. Part of our job is to be respectful of the user experience.

Steve: What are you charging media buyers for these ad formats?
Philip: Overlays start at $10 CPM.
Erik: We’re looking at $25 CPMs
Rebecca: We’re in the middle of negotiating our upfronts, but generally CPMs start at $25 for ROS because we are able to do a lot of targeting.

Chris: When I compare video CPMs to TV, there is a huge premium online. And we’re willing to pay that premium if we know that it is being effective. I think the “teens” is a good rate for pre-roll.

Better from the horse’s mouth than from mine. Besides, I gotta get over to Digital Hollywood.

Display advertising on mobile devices, Google launched it this week, MSN and Yahoo! have been doing it for longer, but really, is a mini banner ad a useful marketing device?

The answer for Google, I guess, is “it can’t hurt,” if other companies offer mobile display ads, Google might as well compete, but when will the innovation come? It seems to me that mobile advertising more than any other form of advertising should be about targeting, hyperlocal.

Above: Google Mobile Display Ad Formats

A banner on my cell phone is just another obnoxious distraction, which like traditional banners will become noise on a page my eyes adapt to naturally avoid. Not something that I will click on. This at least, is a step in the right direction.

Good hour for sports here at OWV. Having just hung up the phone with the NHL’s Director of Corporate Communications, I received a press release announcing that MLB has signed a deal with Yahoo! to make their MLB.TV package available to Yahoo!Sports users.

“Partnering with MLB.com allows Yahoo! to offer our users an unmatched baseball experience, and also presents our advertisers with a new opportunity to reach a large, engaged audience of baseball enthusiasts,” said Todd Teresi, senior vice president of the Yahoo! Publisher Channel, in the statement.

MLB.TV Premium subscribers are offered an enhanced video player with a television-quality picture through MLB.TV NexDef(TM) at either 800k or 1.2MB. Since Cablevision doesn’t offer their MLB Extra Innings package in High-Def, I’ve been watching the 1.2MB stream for the past week on my TV and it looks pretty good. While it doesn’t compete with the high-def sports content available, it is quite a bit cheaper than the same offering via cable.

Ok, back to hockey. OVW will be chatting with the broadband folks at the NHL next week about their new player, their broadband initiatives, and their web only programming like The Hockey Show, which brings the hardest of hard core fans every last bit of information, like what Sydney Crosby had for breakfast, direct to their desktops.

Flickr has launched their video feature and it’s pretty unique. The service, only available to Pro members (those who pay $24.95/yr) offers unlimited uploads and storage. But Flickr restricts the length of clips to 90 seconds, file size to 150MB, and the content; nothing too racy.

Flickr is going for something different:

We’re not trying to limit your artistic freedom, we’re trying something new. Everyone has endured that wedding video, where even the bride will fast-forward to the “good bit.”

Above: Beach Closups by Dunstan Orchard (cc)

And it makes a lot of sense, Flickr has built a community for semi-pro photographers, they have no reason to compete with YouTube. Instead, they have created a simple, elegant player that will fit in well with the high quality photos users are there to share, offers the opportunity to share artistic video in an original way, and they have made the experience a good one.

Reaction from users has been negative so far, but I think Flickr gets it, they’ve gone low-key on purpose. Users will seek them out to upload a very specific type of content (e.g the video above), and when viewing clips users will know it’s Flickr content despite the lack of player branding.

As we mentioned last week, lost in the shuffle of the Yahoo! / Microsoft negotiating was Yahoo’s offer for Maven Networks. Today, Yahoo released confirmation that they had, indeed, purchased Maven Networks for $160 million.

The acquisition continues Yahoo’s infrastructure support for delivering and monetizing video. Last week they launched their Lifestream beta, their entry into the personal streaming game.

After hoping and waiting and praying for something to kickstart Yahoo’s stock, I dumped mine at a slight loss at the end of the year. Damn my accountant.

After the Microsoft offer shot the stock up based on the 61% premium is was going to pay, Yahoo is set to rebuff the offer on the basis of it undervaluing the company.

Two schools of thought. 1) The board of Yahoo greatly overestimates its potential and shareholders are in for more pain or 2) Jerry Yang and the board are right, and shareholders will be singing “happy days are here again,” sooner than later.

Damn. I want to cry right now. Mr. Softy offered $44 billion to pick up the battered remains of Yahoo, stepping up to the plate with the chutzpah to execute a turnaround that seemed unlikely to happen from within.

But what do they get for it? And more importantly, is it worth it? Last week Yahoo stock was trading around $18. Microsoft’s offer of $31 a share is roughly a 60% premium over that. Sure they are both getting their asses handed to them in the search arena, but does a Microsoft with less than 25% combined market share pose a threat to Google anyway? I highly doubt it. Remember, the key to search dominance is results. Give the people what they want, and they’ll come back for more. But someone will eventually build a better algorithm, and users will migrate to that. How many people now find what the info they are looking for on Wikipedia anyway? If I’m not shopping, or looking for specific product info, thats where I head. But those types of searches don’t generate revenue anyway.

So its not for search. Must be for display, targeting and ad serving, right? Makes sense, but isn’t there already a huge overlap in users and services? Yahoo’s ad network has roughly 150 million unique users per month, 85% reach. Yahoo proper has about 135 million with 75% reach. MSN has about 100 million and about 60% reach. Blue Lithium, which Yahoo bought for $300 million also has 135 million uniques per month. Combined and de-duped, however, how much of an audience is really gained? If they are going to continue to frequency cap advertising per ad (ie - user wont see the same ad more than twice in any 24 hour period) across their properties, how much is that going to cut into their revenue? How many advertisers are out there willing to step up and pay the premium price tag for advertising on Yahoo or MSN if and when all that inventory becomes available?

So what else would they get? Right Media, the online ad exchange, should help the optimization of all that inventory, so there’s value there. And Yahoo just offered $150 million for Maven Networks, who powers video for Fox News, CBS Sports, CNet, and Scripps Networks. So there’s even more high value video inventory.

But overall, does it make sense? And is the price right given the economic downturn? If my previous post holds any water, then its a good move for Microsoft. But if its a pure ad revenue play, and ad revenue takes a big hit over the next year, the premium Uncle Bill is paying for Yahoo may look pretty ridiculous. $31 for an $18 share? Well, I’m just pissed I dumped my Yahoo in December to take the loss…..and my lumps.