My CTO mentioned the site AuctionAds to me today and I recalled that I hadn’t checked up on their progress. Boy was I surprised reading Shoemoney’s latest post on the topic:
(AuctionAds was) started in March and has grown to 25,000 publishers showing 300 million impressions a day on over 80,000 unique domains is the hottest new advertising product for 2007.
I think those numbers are impressive no matter what business you are in, but I find them particularly interesting given their traction relative to AdBrite. AdBrite claims around 650M daily impressions across 31,000 sites, which would mean that AuctionAds has nearly caught them in under six months.
Now, there are lots of reasons to questions these numbers and I have seen their ads in lots of questionable locations (such as ThePirateBay). However, I believe the most interesting question to ask is “Why have they grown so fast?”
My hypotheses for the early success of AuctionAds:
- They are compatible with Google Adsense (ie, you can run both)
- There are many sites that Adsense will not monetize (works for AdBrite too)
- The company was started by a famous money maker (ie, powerful distribution)
- The ads are actually relevant content to the site, so folks will run them even if the economics are not super
That all said, the rubber meets the road on economics. I have yet to find any bloggers at scale that are generating over a $.20 CPM, which is still small potatoes in most categories. This will be an interesting one to watch but I am an early believer for sure.
I was forwarded a TechCrunch article today on the launch of a new video ad network called PreRollr. Upon receipt, I was instantely turned off by:
- The overused Web 2.0 use of the missing “e” – i.e., Flickr, Socializr and, now, PreRollr.
- The fact that our company (the leading video ad network), BrightRoll, is the owner and user of the correctly spelled domain, Preroller.com and that we have had live products in the market under the brands PostRoller and PreRoller for some time
- That the ad unit is monetizing content that the publisher doesn’t own (namely content from YouTube, DailyMotion, etc.)
- The reality that TechCrunch continues to cover the launch of any product, regardless of user, customer or revenue traction
That said, the Prerollr product does bring up (again) the issue of ad units and highlights the fact that publishers, particularly smaller publishers, have yet to find highly scalable, revenue generating ad units surrounding video. I am not a believer that an aggressive pre-roll CPC ad unit, such as the PreRollr, will be adopted by users in high volume. Outside of pop-unders, you don’t see many CPC ads overlaid over text and image content, so why would you see it in video?
So what ad units will succeed? My bet is that it will be a lot more like the scalable ad units we have seen be successful throughout the rest of the web. Standards and scalability are essential - the units must be support by both the advertiser and publisher communities.
Catherine Holahan from Business Week wrote “A study by eMarketer predicts the floodgates will open after 2011, when the lines between TV and Web video will be blurred.” I found two parts of this article particular interesting:
1. “Flood gates opening” means the industry is doing $4.0+ billion in annual revenue
2. The barriers to growth are primarily the lack of new (non pre-roll) ad units and cost
I would suggest that flood gates are officially open when the industry does $1B in annual sales, after 3-4 years of near triple digit growth with no end in site. This milestone is not far off and there are many folks that believe this will occur as early as 2008.
However, it is more interesting to discuss what is preventing these flood gates from opening. I agree 100% with the lack of compelling, and scalable, ad units beyond pre-roll and we have spent a fair amount of time working on this problem at BrightRoll. That said, pre-roll is the most successful unit in the market today because it “performs” under the metric of “being seen by the user” and because it scales across large amounts of inventory.
I fundamentally disagree with the cost assertion. In fact, pre-roll cost is comparable, if not cheaper, than similar inventory on television. Furthermore, this CPM comparison doesn’t take into account the fact that television CPMs are vastly under estimated due to Tivo, DVR and the “going to the kitchen” phenomenon that is unmeasured in the Neilsen world.
The other important barriers to growth that were left out of the article are:
1. Advertiser Access to Aggregated Inventory.
2. Standards for 3rd Party Ad Serving on Video Sites
3. Successful Content Filtration Systems on UGC Sites
4. Internet Rights Being Acquired for the Actor’s in Commercials
#1 is probably the most important, as no marketer will allocated significant budget until reach and frequency objectives are met. #2 and #3 are solvable problems and will be addressed by the large players and content providers. #4 is a larger problem than anyone thought, but will be phased out over time.
Online monetization is a broad subject and there are many paths to reaping great returns. As the founder of an ad network, a publisher and domainer, I have used nearly every online advertising tool and platform out there. Here are a few of my “favorite things”;
Contextual Advertising - Google Adsense, Yahoo Publisher Network, Pulse 360, Quigo
CPA Networks - Azoogle
Banner Networks - Advertising.com, ValueClick
Video Advertising - BrightRoll (disclosure - I am the CEO)
Domain Parking - Sedo, Domain Sponsor
Affiliate Marketing - Commission Junction
eBook / Software Sales - ClickBank
Published July 10, 2007
in General.
It has taken me five years or so to get my act together and to put up a “real” website. Well, here is my first version. Feel free to send me any suggestions or feedback, and I thank the team at Automattic for their amazing work with WordPress and Bharath Kumar for his kick ass theme work.
I have been a long time beneficiary of many bloggers - Auren Hoffman, John Chow and Michael Arrington to name a few - and I am happy to be back on the contributing side of the house. I am looking forward to sharing thoughts on video advertising (I am the founder of BrightRoll, the internet’s leading video ad network), online monetization (I am an avid internet monetizer, with a strong domain portfolio and dozens of online properties) and entrepreneurship which is my true passion.
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