Broadband Video Advertising Exchange White Paper

1. Generate Revenue with
Broadband
Video Advertising
For those with a video portal full of
premium content and little to no user-
generated content, video advertising is
all about in-house ad-sales and a great
trafficking platform.
For those building an online
community filled predominantly with
social media and little to no premium
content, online video advertising is
September 14, 2008
Revision 1.0 about a complex mix of ad-networks
and in-house ad trafficking.

2. Table of Contents Broadband Advertising Exchange
Table of Contents
Page
Online Video Advertising Trends............................................................................. 1
Best Performing Video Ad Units .............................................................................. 1
Viewer Experience versus Revenue.......................................................................... 3
A Benchmark Case Study ......................................................................................... 4
Power of Many (Ad Networks)................................................................................. 6
The Challenges of Being Small ................................................................................. 7
Getting Started With Eyespot................................................................................... 8
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3. Online Video Advertising Trends Broadband Video Advertising Exchange
Online Video Advertising
Trends
According to a May 2008 survey conducted by the
Pew Internet & American Life Project, 55% of
adult Americans have home broadband
connections, which has clearly led to a greater
percentage of Americans viewing online video.
According to eMarketer, 2008 will result in over
50% of the US population – 155.2 million people –
watching video online.
The eMarketer then, in turn, believes that
advertisers will spend $505 million in 2008 (which
is 55.9% over 2007 spending). Although this may
still only represent 2% of the total Internet ad
spending or 0.7% of TV ad spending in 2008, this
market is projected to grow 63% annually from
$505M in 2008 to $5.8B in 2013.
The question is not whether there is going to be an
audience for online video advertising, but rather
how this audience will react – it ultimately will
come down to the ad format.
Per ComScore in 2007, worldwide search statistics
show 15B monthly searches in North America, and
9.8B monthly U.S. core searches. As a video
advertising executive, these numbers seemed
surprisingly small given that search represents 50%
of all online advertising revenue and the core
revenue engine of Google and other large online
players.
When comparing these numbers to ComScore’s
own video impression data, the vulnerability of
search as the core online advertising medium
becomes instantly clear. ComScore showed 9.1B
U.S. video impressions in the same period.
So, what does this mean? U.S. video impressions is
on par with core search impressions.
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4. Best Performing Video Ad Units Broadband Video Advertising Exchange
Best Performing Video Ad Units
Ad Format Description Screenshot
Pre-Roll Video Ad This ad is similar to a TV commercial that
runs inside the video player in place of the
video content. The preferred ad length is 15
seconds or less. This ad-unit has the greatest
impact on user experience, but the highest
payout. It’s recommended that it’s used
sparingly – maybe as much as 25% of
inventory.
Overlay This ad is the most popular due to it’s
minimal impact to viewer experience and the
ability to generate reasonable revenue.
Overlays can be text only, graphical, and
include video within the video. It typically
displays at the bottom 20% of the video
screen transparently overlaying on the
original video.
Post-Plate This ad is the least obtrusive and also
provides the least return. It requires that
viewers get to the end of the video, since it is
displayed as a “plate” of one or more static
graphical or text-based ads at the end. Like
the Overlay, it can be click-based or
impression-based.
Post-Roll This ad is similar to the post-plate except that
a video ad is displayed at the end of the
original content. This ad-unit is also non-
obtrusive and will typically be impression-
based, and pay more than a graphical ad.
Traffic your own Using DoubleClick DART to traffic your own
from all the above ads – either “in-house” ads or from a sponsor
you are working directly with.
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5. Best Performing Video Ad Units Broadband Video Advertising Exchange
So which ads perform the best? Eyespot has a lot of experience comparing Pre-rolls with Overlays
(both text-based and graphical-based campaigns). So here’s the net of it all.
If you want the greatest amount of revenue per stream, you’ll pick the pre-roll – hands down. The
above RPMs are based on campaigns run against user-generated content, not the inflated premium
campaigns you hear rumors about for properties like Hulu.com or the like.
The text overlay ad-unit which can be seen by from advertising networks like Google Adsense For
Video (AFV) or Adap.TV gross $2.95 on average. This is before you pay the advertising network
fees which can range from as little as 30% to as much as 50%. These campaigns are exclusively
contextual based – meaning revenue is only made when a viewer clicks on the advertisement.
Therefore, the advertisements better be very relevant to the viewer.
Graphical overlays include more engaging graphical elements, which move around and draw the
user’s attention. These campaigns can be either impression or contextual based. Impression-based
campaigns mean that advertisers are willing to pay whether or not the viewer clicks on it. In either
case, the campaigns typically gross $6.75 per thousand streams – double the text overlays.
The most well-known advertising unit (at least to advertisers) is the pre-roll. It’s not much different
than a TV 30-second ad. These are grossing around $12 per thousand streams today.
So why wouldn’t a website owner with lots of video volume just crank up the pre-rolls and rake in
the most amount of money? It comes down to viewer experience (and availability of pre-roll
advertising inventory too)
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6. Viewer Experience versus Revenue Broadband Video Advertising Exchange
Viewer Experience versus Revenue
It’s clear that the more times you ask your viewers to wait for the content (pushing a pre-roll
advertisement in front of them), the more they will just choose to leave.
You’ll loose 75% of your traffic or more – especially if the content has some or a lot of user-
generated content. We recommend no more than a mix of 25% pre-roll and as much graphical
overlay you can get your hands on.
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7. A Benchmark Case Study Broadband Video Advertising Exchange
A Benchmark Case Study
Below is a six-month view of an online community that is video-centric. Over six months the
customer used Eyespot’s video publishing and monetization solution to deploy two different text-
based overlay campaigns (with two different ad-networks), two graphical overlay campaigns (with
two different ad-networks), and a pre-roll campaign (from one single ad-network) for a total of five
different campaigns, and over five different ad-networks.
From the above graph, we observed typical variations in the performance ot the text overlays.
Variation is typically tied to advertiser relevance due to changes in the types of ads available.
Inventory (the amount of ads available for your videos) is the greatest for text-based overlays.
Graphical overlays are not as readily available because they require an investment in creative (ad
graphics) and advertisers willing to pay more.
The pre-roll campaigns have the most amount of creative available (advertisers typically use their
TV ad creative and repurpose for online video ads). However, the sales cycles are long for these and
because of a lack of video inventory available for pre-rolls, advertisers are not all willing to make the
investment. Pre-roll advertising inventory is not that readily available.
We’ve concluded that if optimized properly, you can achieve a nice balance of revenue through a
combination of pre-roll, graphical overlays, and text overlays. We find that an average of 25%, 25%,
and 50% ad-mix respectively is the ideal. When the pre-roll campaigns are not available, pour on the
graphical overlay campaigns. Notice that in late April this property was generating a peak in
advertising revenue with pre-rolls dominating. However, in late June the same property was able to
achieve the same revenue performance with just text and graphical overlays.
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8. Power of Many (Ad Networks) Broadband Video Advertising Exchange
In analyzing the impact of pre-rolls over two months, stream count was not impacted. Note that pre-
rolls only accounted for 25% of the video volume.
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9. Power of Many (Ad Networks) Broadband Video Advertising Exchange
Power of Many (Ad Networks)
There are few advertising networks that focus on monetizing video with in-stream technologies.
Most large properties are leveraging in-house ad-sales and trafficking ad-campaigns on ad-platforms
like DoubleClick DART. Small to medium-sized properties do not have the budget (or volume) to
justify ad-sales and are left to work with ad-networks.
If you are a smaller property, which ad-networks do you integrate with first? The quick answer is all
of them. The dirty little secret in the advertising space is coverage. You have no chance of
maximizing the value of your online video with only one or two networks.
The above chart presents the performance of five individual networks is shown (in revenue per
thousand streams, or RPM) over a month. As one can see, you have some networks, which are
consistently providing coverage over the entire period, although at a low RPM. Others, display
coverage issues (due to availability of their platform, or availability of the advertising campaign).
The ideal is that you would pick the highest paying network and switch from them to the next
highest paying when there are dramatic changes in coverage or performance.
The dotted line shows the effect of blending these five ad-networks taking into account coverage,
performance, and user-experience all into one – ultimately providing the website publisher with the
best of all worlds. We refer to this as “optimization”.
Companies, like Right Media (www.rightmedia.com), have created this type of offering in the
display advertising space. Others in the video advertising space, like Adap.TV (OneSource) and
Tremor Media (Acuedo), offer ad-platforms, which promise a level of optimization across ad
sources.
Eyespot has built a video platform with integrated advertising which leverages ad-platforms like
Adap.TV and Tremor as well as pure ad-networks like YuMe, Scanscout, Google, SpotXchange and
others.
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10. The Challenges of Being Small Broadband Video Advertising Exchange
The Challenges of Being Small
Eyespot’s Video Network has over 10,000 registered website publishers. We’ve seen the following
challenges for the growing “middle-market” of website properties is as follows:
Don’t have the engineering resources – unless you are focused on digital media, you’re probably
•
staffed with web developers and not video experts.
Not enough inventory – most ad-networks won’t take your call unless you have 1M video
•
streams per month of curated high-quality video content.
Coverage from my ad-network is poor – even if you have somehow pulled off the feat of
•
integrating with one, you’ll never be satisfied.
Social media ad-revenue low – You’ve allowed users to upload their own content. How do you
•
cover your streaming costs on ‘UGC’?
Changes to my video player affects ad-net & visa-versa – Ever get that email or phone call
•
saying it’s time to upgrade your player(s) with the network upgrade to their player component?
Multiple ad-nets = multiple players – Most “sophisticated” publishers will have implemented
•
multiple players, each with a separate ad-network implementation. Can someone say,
“maintenance nightmare?”
What publishers need is the following:
1. A single player component which can be added to your player with a single line of code, or
simple drag-and-drop. No development required.
2. For those who don’t have video players, to receive a selection of designs and layouts with all
enabled with monetization from day one.
3. Access to every best-in-class ad-network
4. Ability to govern the ad-unit mix for your website
5. Ability to control the % of videos viewed which have the ads your chose
6. Real-time access to the performance of your in-stream advertising available from anywhere via
the web
7. No video volume minimums
8. No engineering resources required
9. No coverage issues
10. No restrictions on the type of content (premium or UGC)
11. No maintenance
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11. Getting Started With Eyespot Broadband Video Advertising Exchange
Getting Started With Eyespot
Eyespot offers a “Monetization Component” which can be integrated into any ActionScript 2.0 Flash
FlvPlayback base video player.
For the purpose of this overview it is assumed that your player is playing only one video. This way
various properties can be hard coded intto the component rather than being set dynamically.
The Eyespot monetization offering also includes a full component API. This allows the developer to
dynamically set various properties associated with the video being displayed in the player. This
allows for the scenario where the video player displays any of a number of videos dynamically and
therefore would need to set information about the video to the component dynamically.
Requirements
1. Flash IDE
2. ActionScript 2 code base.
3. Video player using Adobe FlvPlayBack component.
4. Completed video player must be tested from a webserver to avoid sandbox violations.
Installation
1. Extract the files from the “monetization_versionXYZ.zip” file
2. Open the provided “EyespotMonetization.mxp” in the Adobe Extension Manager. MXP's are
the portable files that install a component into the Flash IDE.
3. Click “Accept” the Extension Manager dialog box.
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12. Getting Started With Eyespot Broadband Video Advertising Exchange
4. Click “Ok” on the extension installed response.
5. Review installation by clicking on the “Monetization Component” item in the extension list.
This gives some very basic usage instructions and assures correct installation.
The Eyespot Monetization Component is now installed in Adobe Flash IDE.
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13. Getting Started With Eyespot Broadband Video Advertising Exchange
Usage
1. Open the source FLA for your Flash video player in the Flash IDE.
Select the instance of the FlvPlayback component on your stage and find the instance name
2.
of the component found in the properties panel for later use.
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14. Getting Started With Eyespot Broadband Video Advertising Exchange
3. Open the “Components” panel found in the “Window” menu at the top of the Flash IDE.
4. Drag an instance of the “EyespotMonetizationClip” from the “Eyespot” directory in the
Components panel to the stage at the same level as the FlvPlayback component in your Flash
video player. Make sure it is at the same level as the FlvPlayback component or it will not
work.
5. Click the on the component to select it and give it an instance name in the “Properties” panel.
(Note: The component should have an icon, but don’t worry if it doesn’t)
6. Open the “Components Inspector” panel from the “Window” menu at the top of the Flash
IDE.
7. Enter the name of the FlvPlayback component your recorded earlier in step 2 into the
“FLVPlayback Name” field in the “Component Inspector”.
( Note: If you don't see this field check to be sure that the “Eyespot Monetization
Component” is selected as instructed in step 5 )
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15. Getting Started With Eyespot Broadband Video Advertising Exchange
8. Enter your Eyespot Video Network Partner ID in the “Partner ID” field in the component
inspector.
( Note: If you don't see this field check to be sure that the “Eyespot Monetization
Component” is selected as instructed in step 5 )
9. Enter the URL of the site that your player will be hosted in the “Meta Hosting Site” field in
the component inspector. This should be the root of your URL such as
“http://www.mycompany.com”.
10. The “Dart” properties are not necessary unless you are specifically testing DART integration.
11. The remaining “Meta” properties must be set either through the “Component Inspector”
directly if your are only displaying one video with this player or can be specified
dynamically through the “Monetization Component” API. The API will be available soon.
Below is an overview of the values required for the remaining “Meta” properties:
Censored – (true/false) Censored video. Ad networks need to know if your video might

contain any “inappropriate” content.
Channels – (comma separated list) Your content categories for the video. So a dog video

might be “animals, pets”
Description – (text) Your description for the video

File ID – (number or text) your unique ID for the video.

Hosting Site – (URL) Explained above in step 9.

Title – (text) your title for the video

Video URL – (URL) Your full URL to the page that is embedding your video player with

the video.
12. Again the above hard coded properties will be set dynamically through the component API
for most production applications.
13. Now you will publish your Flash video player to an SWF and upload to your server for
testing.
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16. Getting Started With Eyespot Broadband Video Advertising Exchange
Administration
Eyespot’s monetization solution provides publishers with the ability to control the deployment of in-
stream advertising by allowing for:
1. Turning ads on and off
2. Selecting the mix of ad-exchange versus in-house DART campaigns
3. The maximum amount of each ad-unit as a percentage of videos being served by the ad-
exchange
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17. Getting Started With Eyespot Broadband Video Advertising Exchange
Reporting
Publishers are given two methods of accessing monetization reports:
1. A quick ad-exchange summary report
2. Detailed OLAP reports
The exchange summary report has video views, ad-views, revenue per thousand streams (RPM), and
total earnings (gross), for the previous day, week, month, and year-to-date.
If publishers want a more detailed view, they are given access to a separate login to the Eyespot
Analytics platform, which is a OLAP application providing both canned and custom reports detailing
review by ad-network with metrics that include the number of clicks, CTR, eCPM, etc.
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