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

Another day, another overlay ad format. Overlay ad formats seem to be coming out of the woodwork from names such as Videoegg, Google, Adap.tv, Brightcove and now Pointroll. The latest incarnation – Tickerboy – an AOL and Pointroll joint effort, appears 10 seconds into the video roll and dissolves 15 seconds after inactivity, leaving a branded text link. And it offers full interactivity.

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Fully Interactive!

Phew! The world was presumably suffering from a mere fraction of an interactive ad until now.

But it’s really no one’s fault. There is no IAB or other standard for an interactive overlay or search text link format. So, in the meantime, everyone and their brother are touting a different or unique format. It seems to me, though, that inserting a daily overlay ad format of the week to an already confusing system probably doesn’t help matters.

The bottom line is that all overlay formats have a few basic parameters that still need testing or changing to optimize the user experience and increase the ROI.

With user feedback, the industry can take into consideration several elements of the ad, including: the overlay’s start time and repetition rate, when and how it enters and leaves the screen, the percentage of the video it blocks and its clickability.

But the ad platforms, systems and networks have to allow external control of these parameters if they hope to accelerate the adoption of some standards. That way, advertisers can experiment to see what works and, presumably, make things better.

It seems to me that maybe – just maybe — 10 seconds, followed by 15 seconds may not work for everyone. But that’s just me.

Jayant Kadambi

Ah, the spin. Ask thousands of consumers their thoughts on a particular topic, digest the results and find a way to spin those results into something that makes you say, “hmmm.”

Take, for example, the results of IBM’s End of Advertising Survey, which found that 11 percent of the 2,400 respondents were willing to pay a small fee to watch online video without advertising. Could that mean that a YouTube Premium subscription option soon would be in the works?

So, let’s put our own spin on this. If 11 percent are willing to pay a fee, does that mean that 89 percent of the respondents would not? Sure, we can’t discount those 11 percent who would dig into their pockets for a chance to watch online videos sans advertising. But, as online video continues to evolve and companies both large and small start experimenting with new platforms for distributing that content – such as what we do here at YuMe – it seems that the jury is still out when it comes to determining what viewers are and aren’t willing to watch.

The idea behind a premium service that removes advertising isn’t crazy – after all, look at the popular of HBO-like networks. But 11 percent seems like an awfully small number to consider when developing business strategies. Let’s give it some more time to see what works and what doesn’t – and how audiences, advertisers and content publishers interact with each other on this new medium.

Jayant Kadambi