Visible Measures’ Shin: ‘Choice-Based’ Video Ads Trump Pre-Rolls

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There’s a lot of talk about the need for online advertising to be less “obtrusive.” (Okay, that view is mostly coming from Microsoft with regard to the default “Do Not Track” feature in its latest Internet Explorer web browser. But still.)

When it comes to video, the notion of user control has been a big part of YouTube’s ad skipping TrueView option and Hulu's similar Ad Selector. Boston-based video analytics purveyor Visible Measures recently expanded the use of VidWorks, its ad delivery product that lets consumers choose whether to watch a sponsored message in a video on a publisher’s site or even with a dynamic banner ad. We spoke with Visible Measures CEO Brian Shin about the continued rollout of VidWorks and why he thinks it’s better than the forced model of pre-rolls.

 

How big a part of the business do you think VidWorks will be? Is this going to be Visible Measure’s primary product?

BRIAN SHIN: VidWorks is the sole way that we can deploy advertising on publishers' sites in a way that creates new inventory with the publisher, allows them to utilize all the analytics data that we capture from those publishers to optimize the ad. In terms of the relevance to the business, it’s absolutely the most critical thing that we do on the advertising side for publishers. It’s really designed to be publisher-centric. Nevertheless, our sales team reaches out to advertisers and we can tell the story about how choice-based advertising can increase their bandwidth dramatically and VidWorks is the thing that controls all that.

So how does VidWorks generate money for Visible Measures?

To be clear, VidWorks is an ad delivery technology that allows a publisher to create new ad inventory that’s choice-based. It’s being used on 1,100 different sites now. The way to think of it in terms of the business model is that it’s essentially sponsored content. If you’re a big video site, you’re looking for ways to increase monetization. But pre-roll is really where the focus has been.

The negative with pre-roll is that every time you put a commercial directly in front of some other piece of content, typically there is some percentage of your audience that will get frustrated and leave. Whether that drop off rate is 5 or 10 percent, it’s pretty significant. A lot of people are struggling with ways to monetize without relying on more pre-roll. With sponsored content, a publisher has to leverage real estate that you might not currently be using to make revenue. And therefore, it doesn’t have to take away any existing revenue program. You’re just adding something that's new and all the revenue is incremental and it can be immediate.

In turn, that allows the user to choose what they want to engage with. If they do choose to watch a sponsored video, then the advertiser will pay us and then we give some revenue to the publisher. That’s what we mean by stressing the value of choice-based advertising. It’s very similar to how AdSense works, like someone has to choose to click on the ad, it’s very similar.

Does VidWorks build on past Visible Measures’ products? Does it replace them or just build on them?

It is an evolution. We first had this product called VMP, which involved getting data from a publisher of players and then it goes into this thing called VMP, which is our analytics foundation. VMP is kind of like Google Analytics but for video, it’s kind of like Omniture for video. VMP sends data to VidWorks and VidWorks is like AdSense. As a publisher, you can have both for free. Typically, people think of analytics on the publisher side as being a cost center.

It’s like if you use Omniture, if you use CoreMetrics, if you use any of these things, even Google Analytics, there are consulting firms that charge money to set up a deeper look. In our case, VMP is free, the analytics are for free and VidWorks is a way for you to actually generate revenue immediately. That revenue doesn’t require you to turn off any existing program that you’re using.

Why did you decide to seek $21 million in funding this past summer? What are your plans for the money?

We didn’t really seek any funding. We had raised money last year and we were very well funded. But there’s always been a lot of interest in the company and it was preemptive. One of our internal investors said, “Hey, we want to lead the run, we want to compete with these external guys.” It gives us more ability to expand geographically, as we plan to focus more on international this year.

We have a big investment in our data platform and in our engineering team and so we can keep hiring more engineers, while at the same time, enlarging our sales force. We are really trying to evangelize a better way for marketers to interact with their consumers in a way that’s better for the publisher and for the video viewers themselves. And that takes resources. At the same time, we’re lucky to have growing revenue, and we’ll grow revenue over 300 percent this year. We grew revenue over 450 percent last year. So, it gives us a lot of leeway to expand without constraint.

Follow Brian Shin (@brianshin) and AdExchanger (@AdExchanger) on Twitter.

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