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VideoEgg is Smart, Very Smart – Launches AdFrames To Capitalize On Industry Shift and User Mistakes
Last year when I sat down with VideoEgg CMO Troy Young, one of the items we discussed was metrics for the video ads they serve. He spoke of very high engagement rates. I asked what percentage of the engagement was "mistake" engagement — that is, people trying to close the ad but missing and clicking the ad or not being sure what to click to close it, similar to when flyover and layer ads arrived on the scene years ago.
Today VideoEgg is launching AdFrames, a program that charges advertisers based on engagement (CPC/CPE) instead of views (CPM). VideoEgg notes that they have dealt with mistake engagement, "Engagement doesn’t begin until a user rolls over the ad, and the AdFrame Invitation has expanded into an overlay. AdFrames includes a countdown during the roll-over to ensure the user is not engaging with the ad inadvertently." From my basic testing, the countdown is three seconds, that’s the time that the user must keep their mouse over the ad before it plays. This should help eliminate some of the mistake engagements but not remove them 100%.
In their sample ads, when the user engages with the small teaser ad unit, the ad opens up full page. These type of takeover ads should pay out very well, both for the advertiser and for VideoEgg.
It’s a very smart program and should help to continue the shift away from traditional CPM (cost per thousand) advertising. The question is whether there will be enough engagement to make it financially beneficial for VideoEgg. By removing some of the mistake engagements, will the fill rate be high enough?
VideoEgg is also going to manage the entire process, something they claim will save customers 10-20 percent or more of the advertiser’s cost. They are looking for publishers with more than 10 million video streams per month.
Microsoft has signed up as the first advertiser in the new AdFrames product. VideoEgg will still offer their CPM-based advertising programs as well.
I assume this will be a topic of discussion at the VideoEgg Engagement Debate this afternoon in NYC. I will try to get some time with the executives to learn more and will report back.
Update: Head Masher Adam Ostrow has posted a video with Young which I’ve embedded below:
I love the concept behind videoegg, they are leaders in advertising and people will be following these concepts. One limitation appear to be that it’s not well equiped to target niches, specifically small or ‘long tail’ niches. As a publisher, niche sites will often not drive the volume that they are looking for, and as an advertiser you are limited to the most effective channels that already exist in their publisher network. There is an opportunity in this area for a company that will provide tools for people to manage their own advertising and publishing like Adwords/Adsense does, but taking advantage of the rich user experience and trusted and branded advertising channel that videoegg is creating.
I how the advertisers are smart enough to be using CPM or CPA, not CPC. If not, I guess they deserve to be fleeced.
Any day where I can pay a premium for a well-defined set of actions rather than hard to measure CPM deals, I’m happy.
Allan – have you looked into CPA advertising? If that is what you are really looking for, then it will make you happy…