Online video syndication has had a checkered history over the past five years or so, and the notion of guaranteeing video views lurked near the backwaters of the video scene, in close quarters to the shadowy axis of ad unit autoplay, view fraud and outright gaming of the system. Paid video syndication, an increasingly larger part of most branded entertainment campaigns, has become a business of its own, though still clouded by the murky associations with practices with which the industry is still grappling to form its opinion.
San Francisco-based Alphabird is emerging as the leader in the paid video syndication business, while at the same time battling the perception issues of its field. It touts its ability to “guarantee audience” on premium website publishers and YouTube, insisting that its videos are distributed in-page, as opposed to in-banner. Clients like Warner Bros., Disney, Fox and Fremantle Media and have turned to the company to help push out its online video projects to prospective viewers strewn across a myriad of premium portals and influential blogs.
Today AlphaBird announced it has acquired brand integration matchmaker PlaceVine for an undisclosed sum. Co-founded in 2007 by Adam Erlebacher and Greg Neichin, PlaceVine was the winner of The Wharton Venture Award, for building a platform that matched brands with placement and sponsor opportunities in web, TV and film projects.
The acquisition gives Alphabird a working platform of content partners and brands looking for audience, making the addition of a wide reaching syndication network an apparent smart move. “Alphabird’s ability to deliver content to the right audience makes it a natural home for PlaceVine,” says Erlebacher of the deal.
Higher CPMs Than YouTube
Coinciding with the acquisition, the company is launching the PlaceVine Contest Platform, which plans to systemize the process of online video contests and effectively lets web video creators generate high CPMs—starting at around $20 all the way up to $100 or more—on the views those creators generate from YouTube videos made for the campaign. The first contest features SF-based music label The Royal Factory, who is offering an award pool of $20,000 for videos in response to its creative brief to drive interest in new artist Austin Brown.
The hook for video creators is the lure of significantly higher CPMs (cost per thousand impressions) on their videos by a magnitude of about ten times what they earn from YouTube’s partner program. The $20 CPM is on the low end, says Alphabird COO Alex Rowland, with brands able to set the CPM they choose.
“In general we’re looking to solve two problems,” adds Rowland. “One, the ability for brands to connect with audience in an authentic way, and two, to give YouTube creators a bridge to get some of these lucrative ad deals.” He points out the issue of many of the brand dollars flowing towards the top channels, which smaller growing channels aren’t able to command enough scale to participate. The new platform effectively lets the video producers ‘group-buy’ in effect, a creative brief from a brand and parcel out the inventory to several creators.
But will Google be okay with letting this many brand dollars flow around them while still using its platform for delivery? “I would love to get the phone call from Google’s legal department saying we’re shutting you down,” adds Rowland. “I think that would be antithetical to the marketplace saying we want to help these guys, and it sounds kind of evil to me. You can’t sit there and say you can only monetize video through Google.”
Pay for Performance
Alphabird CEO Chase Norlin talks about the difference between what they call the two classes of online videos—those with asset values and those without asset value. He concedes there may in fact be middle ground, but in general he’s talking about asset value video having existing IP value from other media—think 30 Rock clips or movie trailers—with non-asset value video being much of what we consider web original videos and series.
“We are in the business of taking no asset value content and turning it into something that has value,” says Norlin. “Where the client is paying us on a performance basis to make sure people want to watch that content.”
“When we started, we were syndicating viral videos for clients,” adds Norlin. “But now it’s actual series like Jen & Barb Mom Life and Disney’s The Possibility Shop. Norlin points out that they now have around 40 episodes going out weekly on targeted web site publishers.
While the idea of paying for audience can sometimes rub video creators the wrong way, particularly those with limited resources, the model relies on getting the video products in front of would-be viewers, but then letting them make actual decisions to engage. And it’s only those engagements that count towards views—and count towards the performance budget.
This mirrors an overall shift in the online video industry towards Cost-Per-View (CPV) and Cost-Per-Completed-View (CPCV) budgeting rather than impressions on videos. Even YouTube acknowledged this week that by 2015 some 50% of its video ads will include cost-per-view video, meaning that the viewer initiated the ad in some manner rather than through autoplay.
“Stuff doesn’t go viral,” adds Norlin. “You do have random hits, like Rebecca Black, and there seems like there’s more of them because of the press. But it’s very rare. You have to pay to activate great content. That’s what we are doing. That paid activation makes that happen on the internet.”