Google made a quiet announcement earlier this week, announcing several new functions in its TV ad auction service. Something that caught my attention was self-service tools for small advertisers to create their own ads. The Google executive, who made the announcements during an event with the New York Advertising Club, repeated that Google is not getting into the agency business.

It’s an interesting development for a few reasons. First, I think anything that improves the efficiency of television advertising is a good thing. That’s what we’re trying to do here at YuMe with the specialized metrics we offer our customers. Second, the idea of self-serve tools to help small ad buyers is a good one. Web-based tools have made it easier than ever to create original content, edit it and distribute over the Web. For small businesses with small budgets, it’s like unlocking the door to a whole new world.

Finally, there’s the Google factor. Clearly, the company is one of the most recognizable brand names around the globe. The name itself is one that can help raise awareness about the link between Web-based ad services and television-like video. As television continues to have a stronger presence on the Internet, the online ad becomes a bigger component. And eventually that positions a company like YuMe to broaden its exposure.

Jayant Kadmabi

January is about to come to and end and it has been a busy month with a lot of exciting news. First, YuMe entered ComScore’s Top 50 Ad Focus Ranking at number 37, then we announced our deal with NBC to be their advertising platform for NBC Direct, and now we are excited to announce that YuMe is an AlwaysOn OnMedia Top 100 Winner, recognized for our game-changing strategies in advertising!

Lynn

It’s definitely fun and exciting to be part of an announcement that has the potential to modify or perhaps – OK, let’s be pompous about it - alter an entire industry: the generations-old television content distribution and advertising business. That’s where YuMe are today as we’re announcing a deal to provide ad management services to the new online NBC Direct service.

It’s no secret that the Internet has sent some shock waves through Hollywood and Madison Avenue as tried-and-true advertising models have been threatened by the arrival of online video. But this deal – which allows consumers to watch premium prime time content free via the Internet – reinforces the idea that that decades-old approach of offering free content in exchange for watching ads is not dead. Far from it.

Consider Deloitte Services LLP’s annual media consumption survey, which found that 31 percent of respondents said they are influenced by pre-roll video ads while more than 60 percent said they were generally willing to see more online ads if they could get valuable free content. At the same time, comScore, a leading tracker of online traffic, released its December figures, noting that ads served by YuMe are reaching 46.9 million unique visitors per month – not too far behind YouTube, which reaches 56.6 million.

From an advertising perspective, there’s no comparison between viewers of YuMe-served ads on NBC Direct and YouTube clips. Google-owned YouTube is doing what it can to break its reputation of being home to the video clips of amateur and sometimes sophomoric antics. On the other hand, NBC Direct is offering professional premium content – hit shows such as “Friday Night Lights,” “The Office” and “The Tonight Show with Jay Leno.” You won’t find any pet acrobatics or skateboarding wipeouts there. But what you will find are viewers who are loyal, engaged in the content and obviously tech-savvy – after all, they’re watching online, on their phones, on their handheld media players and even on their WiFi-connected HDTV sets. Seems to me that this is exactly the type of audience that NBC advertisers want to reach.

Combine that with the in-depth data that YuMe can provide – such as real metrics on viewership and ad performance in downloaded, as well as streaming, playback – and you’ve got the beginnings of a formula that could finally give the television networks the type of online monetization option they need to adapt to their changing industry.

Is our approach a strong, viable option for networks that are trying to develop a monetization plan for this new form of distribution? Of course, we think so. But we’re also not saying it’s the end-all method, declaring victory over other models. This is all new and it’s going to take time to figure out what works. Viewers, who have more options than ever before, are calling the shots these days. They will make or break the models.

Believe me, I sleep better at night when I hear that a large majority of consumers say they’d be willing to watch more ads in exchange for valuable free content, that’s something you can’t ignore. We hope to keep rocking the boat with more of these types of announcements in the coming months. As they say in TV, “Stay Tuned.”

Jayant Kadambi

As we’ve mentioned before on these pages, when we started YuMe, content owners were far less willing to distribute content online than they are now. Over the past few years, the distribution of content online has increased from negligible to a trickle to a veritable flood. At every turn, one sees content owners attempting to maximize viewership and reach by distributing their content online - not only on their Web sites but also on affiliated sites, peer-assisted distribution points, mobile networks, and in a fairly recent trend, through downloads.

Downloading content allows one of the best viewing experiences. Basically, it’s a digital DVD. We could make the argument - and we will - that the experience of watching downloaded content is superior to DVD in the long run. Not only can viewers pause, rewind and stop the video, they can also watch in HD quality and they can often choose to watch from their computers, handheld devices or even TVs (albeit through extension devices and set-top devices). But the best part is that users receive more economic choices related to watching the content. In addition to the usual subscription, pay-per-use and rental services, we also have the option of watching the content on an ad-supported basis, perhaps at a lower cost or even for free. Choice is good, isn’t it?

Now, personally, I’m not a big fan of being spoiled for choice. For those of you who don’t know what I mean, just stand behind someone in line ordering at Starbucks when all you want is an overpriced, weak cup of coffee in a supposedly environmentally friendly holder. I’ve now started frequenting the corner coffee shop or Peet’s instead of Starbucks because my local Starbucks thinks the normal or default latte should be non-fat. Imagine having to say short latte, …pardon? …, no, not non-fat, soy, or 2% milk, regular, normal, plain white milk to receive a 8.0 oz cup of coffee with warm milk. Sheesh.

But I digress. The actual point here is that content distributors now have the option of reaching the digital home through downloads, via an ad-supported model. In our opinion, that allows for a tremendous viewing experience. It is high quality, lean-back, and basically a better DVD. And it comes with the option of being free or subsidised. In the end, both the content owner and users are happy, assuming the ads are contextual and not too intrusive or too numerous. And, of course, those who don’t want those ads have the option of a paying for an ad-free experience. I’m sure most viewers realize that even when they do pay, they still are being subjected to ads, masqueraded as trailers. With YuMe’s technology, even those trailers can be relevant.

We at YuMe are seeing more and more content owners expand their distribution of content to downloads, set-top devices, personal computers and hopefully soon, directly to the TV, thereby reaching more people. After all, that is the goal - and making a bit of money in the process, as well. In the end, all of this goes to show that our mission to help monetise content wherever, whenever and in whatever format seems to be working.

Jayant Kadambi

In case you missed it, Apple made a couple of announcements at this week’s MacWorld, including one about movie rentals coming to iTunes and AppleTV. Immediately, the bloggers and news outlets – as well as Wall Street – started talking about the impact to Blockbuster, Netflix, Movielink and others.  In addition, as I’ve mentioned in previous missives, Apple follows a long line of defunct, semi-defunct and new on-line movie distribution companies, most of them not using an ad-supported model, but preferring a subscription or pay model.

Apple has never been a proponent of an ad supported model, opting instead for pay models on music, TV shows and movie purchases through iTunes and iTV. But unlike the simplicity in pricing that Apple once offered through music downloads on iTunes, this new rental feature adds another layer of complexity for consumers – one price for standard-def and another for high-def, alongside limits of how long the movie is available for viewing.

It seems that since they’ve complicated things already, Apple could have considered the option of advertising-supported content and really provide choice to the customers.  “Download HD content for free with ads, or download it for a price.”   It’ll probably be an accretive source of revenue and it’d be a great experiment.  With Apple’s cachet and brand equity, advertisers would jump at the opportunity and we’d really get an apples-to-apples test.  And the ads would be about as intrusive as trailers are during movie rentals, which is not very, especially if they are contextually targeted using a good ad management system.   We at YuMe are seeing a rapid growth of online video distributors as well as audiences that are willing to watch an ad for the chance to view content for free, or at least at a discounted rate. Just look at how traditional television networks are expanding their ad-supported lineup of free offerings on the Web and stay tuned for announcements from us in this area.

To be fair, the success of rental or ad supported distribution mechanisms such as Apple’s iTV is dependent to some extent on the studio’s willingness to license content when they know it’s being ad supported.  But we know it is being done on an ever increasing basis by large and small distribution networks alike and it seems that the declaration of success of this new offering from Apple may be made with limited data.  Sure, this time around, Apple has the support of all of the major studios. But is the lineup enough to get consumers to turn their backs on Netflix and Blockbuster and cough up $3.99 for a 24-hour rental?  Maybe they will call us up and we can set them up to earn most of that $3.99 back on ads, and see what happens.

 Jayant Kadambi

So I’ve been at YuMe for about 4 months now and being the start-up that we are, our Marketing group consists of two people focused on research – me and my manager, Molly.  We’ve been working diligently with comScore since November to get our video network tracked in comScore.  For those of you that aren’t familiar with comScore, it’s an Internet audience measurement service – reporting on online media usage, visitor demographics and online buying power.

On Tuesday comScore released their Top 50 U.S. Web Rankings for December 2007. And, guess what?!?!  Yes, I’m going to tout and represent (come on now, I’m a proud YuMe cheerleader)!  The YuMe Video Network entered at number 37 in their Top 50 Ad Focus Ranking with 47 million unique visitors per month. Citing straight from the release:

“Advertising.com continued to lead the Ad Focus ranking of ad networks and sites accepting advertising, reaching 86 percent of the more than 183 million Americans online in December. Specific Media gained four spots to capture the fourth position reaching 77 percent of the online population. Collective Media gained seven spots to position 14, while Amazon.com climbed three spots to 34. YuMe Video Network, About, and Disney Online all entered the ranking this month capturing positions 37, 44, and 48, respectively.”

YuMe making its mark at position 37 is pretty impressive, if I may say so myself.  The YuMe gang is often called “irreverent,” but when we saw the news, we were pretty stoked.

Lynn Cayabyab

The biggest technology show of the year, the Consumer Electronics Show in Las Vegas, is just about over. If you’ve never been, it can be an overwhelming experience. Companies go all out to show-up one another on the show floor with their massive booths and enormous video displays.

YuMe did not have a booth at CES but I was there to speak on a couple of panels about online video and the changes that it’s bringing to the online advertising space.

On the show floors, companies such as Microsoft and Hewlett Packard used large video screens to showcase their products and services, new technologies that are giving the consumer control over the types of content they want, such as their networked personal library of videos, photos, and music. They’re also showcasing the growing number of video choices available on the Web, from network television shows to feature-length movies.

On Monday, I spoke on a panel called, “Advertising in P2P, Search, Social Media and other Web-Based Services,” sitting alongside others who are also seeing changes in this space.

It was an interesting session and, if nothing else, it just goes to show that this concept of alternative advertising is in its infancy. The alternative ways to get a message across – things such as Facebook “gifts” – are starting to grow and advertisers seem to be receptive to exploring new ways.

One of the things that allows YuMe to stand out in a crowd is its tools for tracking an ad. Advertisers need to know what happens to their ads online, things such as when they were watched and where they were watched – over a peer to peer network, via a social networking site, even over a mobile phone.

Increasingly, advertisers are being presented with new opportunities to put their messages in front of the right audience. As this space continues to evolve, YuMe is committed to help connect advertisers with content providers to give both what they need to move forward.

Jayant Kadambi

Damn.  I guess I purchased my Sharp Aquos HDTV too soon.  Vudu announced a while ago that any new Sharp HDTV over 42” would receive a free Vudu box.  I wondered how they were going to get that box into everyone’s homes.  

You’re probably wondering what I’m talking about.  OK, here is the short-form kahani (story).  Every time I see an instance of a company (YuMe’s original plan was similar; to license and distribute content to people’s homes and monetise using our ad management system and networks.  We have a home-grown set-top-box and a set of licensed long-form theatrical movies on our balance sheet to prove it) that is attempting to distribute another device into people’s homes, I hope that they will support in-line, run-time advertising insertion.  Maybe I’m being nostalgic for the YuMe business, but ad monetisation in conjunction with PPV/VoD, if not instead of, still seems to be the only economic model that works. 

The startup business world is littered with the dead, dying or surviving shells of companies that have tried licensing, distributing (with and without set-top devices).   Moviebeam, Akimbo, Cinemanow, Movielink, Apple’s iTV, Netflix and I can go on.  To be fair, some of these companies didn’t distribute a set top device, and some are moderately successful, but I’m probably not going too far out on a limb by saying the business model on a PPV or VoD basis is not easy, and may be a black hole.

I hope that over the past few years that the content owners from whom Vudu and others are licensing content will allow them to monetise the content using advertising in addition to the usual PPV or VoD models.  If nothing else, it’ll help the user experience, and add to the revenue base of the company.

I think I’ll call Marc Jung and ask for a free box and more importantly if he has the right to insert ads into the content he’s streaming into his customer base.  It’ll help his economics, of that I’m sure.   It’ll also be a great outlet for relevant ads.  I know I’d love to see the trailer for the next 007 movie when I’m watching the Bourne Ultimatum on Vudu rather than the trailer of some soppy movie that my wife enjoys.  If I have the choice of purchasing the movie, renting the movie, or downloading/streaming the movie with a few ads, how can that not be better…. Right?  Isn’t choice always better?  OK, it’s not, but in this case I think it’s an improvement and a step in the right direction

Jayant Kadambi

Go check it! http://www.onlinespotlight.no/en/Christmas07/ 

It’s real progress. What you are viewing is a piece of content being played and rendered in a Microsoft player and you can interact with it. Imagine that! So I figured out that I was watching Jackass 2.5 on my PC/TV using a MS Silverlight player. Yes, ladies and gentlemen, the new Microsoft Media Player has been renamed Silverlight. Who thinks of these names? 

Silverlight brings, among other things, interactivity to streamed video content in a web page and in a PC environment.   This is great, because, in addition to getting the comfort of Microsoft’s DRM and content distribution solutions, content owners can now use the interactive and advertisement insertion capabilities present in Silverlight to increase the monetisation possibilities of their content when distributing online. They won’t have to worry about whether the content distribution site or company is using this format, or that format, or is only Adobe Flash-based (we’ll talk about AMP later) or is Windows based. It’s about time, with due apologies to Divx, Real, and others that the three biggies, Quicktime, Flash AND Windows players all support interactivity and relatively dynamic and complex ad insertion, playback and tracking/reporting.   

Our Ad Management Service already supports a few dozen (OK, that’s an exaggeration of sorts), players and formats, and adding support for this is in the product queue, but once it’s in, we’ll be able to provide the same reporting, tracking and ROI capabilities we currently do on FLV/SWF and .MOV content on .WMV and VC1 content. And that’ll be a relief. I’m getting tired of asking after whether content owners distribute content in this format or that. They shouldn’t care, as long the player and distribution system is safe, and they can monetise it, they’ll be happy.

Jayant Kadambi