Presenting at breakfast is a challenge – people are trying to stay awake and you have to shock them to get their attention. So we wanted to come up with an idea that would make sure that everyone in the room remembered Adconion and our newest product, the Joost Video Network.

We gave the attendees three reasons why they should partner with Adconion and use the Joost Video Network for their video advertising needs.

The first was our people. The second was our products. And the third was our innovation.

Sounds pretty straightforward, doesn’t it? And maybe not like the kind of presentation that will keep you awake before your second cup of coffee.

But everyone who left the room was buzzing, according to eyewitness accounts.

At the end of the presentation, we gave attendees a sneak peek at one of the projects we’re working on. You’ve probably heard of the iPad? You won’t be able to get your hands on one until April 3, but we’re developing a Joost app for the iPad. Like the Joost app for the iPhone, this app will let you watch videos from Joost over WiFi connections for free.

Why are we working on this? We’re working on this because we’re determined to deliver targeted ads and content wherever you are on the Internet – whether you access the Internet on your computer or on your mobile device.

Stay tuned…we’ll let you know when the Joost app for the iPad is approved and in the app store.

One of the important steps in this process is educating our teams on video. A lot of our employees come from online video backgrounds or branding agencies, but for a long time, Adconion has been focused on performance marketing. With our move “up the funnel” to video advertising, it’s important to us to get all of our employees up to speed on the mechanics of an online video branding campaign.

It was during one of these trainings last week in Santa Monica that I mentioned a concept that lies at the heart of the differences between branding and conversion campaigns.

Most conversion campaigns have a clear call to action, such as  “Click here to buy now,” “Sign up now to talk with an agent”…the goal is pretty straightforward: here’s a little bit about our offering, now buy it or use it. So if someone is in the market for an item (which we know because it’s a targeted campaign), and doesn’t jump (or, in this case, click) the first time, and doesn’t click the second time, the traditional school of thought is that you’re better off saving the ad impression for a different user. It’s common to see frequency cap around two impressions for these types of conversion campaigns.

As you move up the marketing funnel, though, these rules change. Campaigns become less about driving an immediate action and more about building brand awareness or provoking evaluation of the product. Building brand awareness requires a different formula between the two key elements: time and exposure. Branding campaigns need to serve a higher volume of ads over a shorter period of time – or at least a higher volume of ads over the same period of time – in order to increase brand recall, brand recognition and/or brand loyalty. For online branding campaigns, it’s common to see frequency cap set to as high as 5 to 10 per creative execution  – versus the one or two ads per month per user you see with online conversion campaigns.

Since this disparity exists with frequency capping, a very common and (presumably) straightforward campaign element, imagine the potential disparities for other elements of a performance campaign versus a brand awareness campaign – such as day parting, targeting and reach. Frequency capping is just one indicator of the differences between running successful online branding and performance campaigns.

What people might not have realized is that we’ve been building our video capabilities for nearly two years. From technology acquisitions to our exclusive relationship with the branded entertainment studio RedLever, we’ve made strategic investments so that we can deliver a complete online video advertising solution.

Today, we’re launching the Joost Video Network, our comprehensive line of in-stream and in-banner video advertising solutions. We’ve built the Joost Video Network with our experience as a display ad network, our understanding of audiences, and our proprietary targeting algorithms, combined with our in-house video and ad serving technology.

All of this delivers global video advertising capabilities with the reach and quality of a video portal, but the scale and efficiency of a network. At the same time, our network is DoubleVerified and IASH compliant, so all video campaigns on the Joost Video Network run in brand-safe environments. In practice, this means that video ads will only accompany premium content; all video ads only appear on our network of premium publishers.

This is an important launch for us, but it’s also a continuation of our existing strategy to be a strategic partner for advertisers and brand marketers, providing them with online solutions to reach customers throughout the marketing funnel.

For people who still wonder why we purchased Joost assets, here is the answer. We’re serious about video, and we’re committed to providing the most complete solution in the marketplace.

And they should be. With the erosion of the broadcast hegemony, and the rise of DVRs, video-on-demand and online video, this merger has the potential to shake up the digital industry.

The fact is that an increasing number of Americans are watching time-shifted TV, video-on-demand and online video – and not just on YouTube or Hulu. According to the comScore Video Metrix, more than 50% of online video viewing comes from sites outside the top 25.

All these shifting habits are probably still good news for Comcast. In addition to offering subscription-based DVRs and pay-per-video-on-demand, online video is likely driving demand for Comcast’s broadband services. Once a customer has a broadband connection, there’s little chance they’ll downgrade to dial-up. But as more videos become available online, people might give up their Comcast cable subscriptions. That’s not good news for Comcast, and one of the reasons behind their partnership with Time Warner Cable to provide “TV Everywhere.”

“TV Everywhere” is an attempt by Comcast and Time Warner to go where their audiences are going. After all, people don’t care about the technology that delivers their favorite programming to their screens – they just want the show to play when they hit “on” or press “play.”

With the addition of the NBC Universal cable networks – Bravo, USA Network and SyFy, to name a few – to Comcast’s existing cable networks – like E!, Versus and The Golf Channel – and a dual-stream mode of content delivery, Comcast is well positioned to deliver content to people who want it when and how they want to watch it.

And in our increasingly fragmented media landscape, aggregation and distribution is a good business plan. It’s not enough just to aggregate – it might be sufficient in the short term, providing an incremental revenue stream or somehow making up for lost revenues in other areas of the business. But in order to reach the largest possible audiences, or retain an existing audience, distribution is necessary.

Comcast knows it can’t rely on cable subscriptions forever; NBC knows it has to find a way to monetize its broadcast and cable programming online. Both companies – and other MSOs, studios and record labels – are trying to solve a distribution problem they’d previously had under control, but has broken down in the digital age.

If this deal goes through, it will be a big digital win for Comcast. It already owns the methods of distribution, the two most common pieces of technology people use to access these shows today – the cable and Internet connections – and with the joint venture, it will have found a way to keep these pipes important.

Comcast has chosen its means of audience aggregation, but it’s not possible, and certainly not economical, for a company that wants to become an integral part of content distribution to build its own technological infrastructure. Fortunately, people behave more fluidly on the Internet than they do at home in front of their TV, and it is possible to aggregate interesting and targetable audiences of people online.

Whatever the aggregation technique, and whatever the distribution method, the goal is the same – to distribute content to relevant, interested audiences – and, of course, to make money doing it.

But it’s not just the pace of business that keeps us moving at Adconion.

Online advertising is certainly a fast-moving industry: advertisers, agencies, publishers and content owners are still jockeying for position to figure out the best way to add value to their brands and make them stand out online.

We’re an active part of that industry, trying to move it forward by offering advertisers and agencies with strategic executions, targeting and data analysis to reach key audiences, and working with publishers and content owners to increase the value of their properties online.

But we also have aggressive plans. We’re moving forward, expanding our offering both in terms of our products and in terms of our global reach. We are moving aggressively into the online video industry, because video is one of the most compelling advertising formats, and we believe our background as an audience network gives us the skills we need to syndicate monetized content successfully online. That’s right, monetized content – advertisers are, after all, at the core of our company.

We’ve always been a global company, but we’re expanding even more aggressively. We have 16 offices in seven countries on three continents, and will be growing our headcount by approximately 50 percent this year. Aside from organic growth, we’re taking advantage of strategic partnerships to grow our reach globally – like our exclusive partnership with Goldbach Media Group that gives us exclusive access to inventory in Central and Eastern Europe.

Our goal for this blog is to share with our clients and partners the strategies that are driving our business, insights on our industry and events and activities that are going on at Adconion. We look forward to sharing our adventures with you.

Growing faster than any medium in history, online video has replaced text as the preferred method of disseminating information and entertainment across the Internet.  More content begat more viewers and vice versa.  Advertisers are now cognizant that this digital ouroboros offers opportunities to connect with consumers who are quickly adopting the medium.  To wit: online video ad revenue increased by 125% last year and is expected to top $4b by 2013, according to eMarketer.  The rapid growth in popularity is a boon to the monetization potential of online video, but it isn’t as simple as slapping a pre-roll down along the video stream.  Doing so would be a major step in the wrong direction.

An expanding audience means a fractured audience. Watching a baby laugh maniacally is great once, but people are inevitably going to gravitate to their interests. The result of this affinity migration is a fragmented audience that can quite often have little to nothing in common. This is why simply serving an ad is not an effective way to utilize the medium. Jamming a square peg into a round hole doesn’t work elsewhere, so why would marketers think that notion is suddenly applicable here?

The glut of new information and insights now available ensure that smart networks are able to connect marketers to the right audience. Or put another way, instead of serving ads or content, networks can effectively use the data available to serve up an audience to advertisers.

The merits of an audience network can be determined through its targeting and measurement capabilities. New metrics continue to pop up as technology advances. The click-through – once the statistic for determining campaign success – doesn’t mean as much anymore. For example, in video the click is more telling than the actual click-through. A click shows engagement; the ad was compelling enough to the viewer to interrupt the video stream and focus elsewhere. That’s a powerful moment. From there, the networks with top technology will be able to cull the information on the who, when and why of viewer engagement.

In addition to new technology changing measurement metrics, innovative models of video delivery are also forcing marketers to rethink accepted practices. The “push model” is an example of this. This type of distribution – a combination of the tried and true methods of video destination sites and the aggregated audience reach and targeting of a network – lends itself to new methods of determining ROI. The video is now being delivered directly to the viewer in different formats and environments. With each unit served, more data is being compiled to better optimize the campaign and give advertisers a better sense of how consumers are interacting with the video content. Think of it as a self-policing ad campaign that automatically adjusts for optimal performance and it’s clear that the traditional methods of measurement almost become moot.

The way people interact with the actual video player and the content will also provide valuable data for marketers and producers of the content. Video manipulation – started, paused, stopped, full screen, mute, sent to a friend, etc. – can tell a lot about engagement levels and what content and aspects of the brand are ultimately engaging the audience.

Online video advertising will continue to evolve as more eyeballs switch from TV to computer screens and advertising dollars follow closely behind. The technology and the methods discussed above are already being implemented by networks that realized the potential of online video early on allowing the number of advertisers tapping into online video’s potential to grow as fast as the medium itself.

Ad networks must evolve. They need to do more than they traditionally did, and do it better. Even though Adconion was founded as an ad network in 2005, I say “they” because we don’t put ourselves in that category anymore: Adconion is now an audience and content network.

Some might call this semantics, or marketing spin. On the contrary, it’s a new iteration and mindset that both ad networks and their partners, from brands and agencies to publishers, will derive immense benefits from.

The Industry Change

Scale will always be valuable – reaching a critical mass of Web users – but on its own it’s now woefully inadequate to all stakeholders in the online advertising ecosystem.  The first step in evolving the ad network model is to do the original business, just better; basically, helping brands and publishers more quickly and efficiently achieve their goals of effectively reaching a defined target audience.

It’s worth noting that agencies and publishers are under mounting pressure: brands are using fewer agencies even as marketing dollars are continuing to move online, and agencies have fewer resources to service more needs, all with a huge emphasis on performance. Publishers are squeezed by the challenging macroeconomic environment and generally declining CPMs.

Agencies in particular should look to evolved ad networks for support. Data is more valuable now than ever, and networks with flexible technology can build customized reports for agencies. These custom reports offer deeply nuanced analytics and new levels of granular insight into campaigns, and –above all – the audiences agencies seek to reach.

Combining Audiences with Data

A focus on understanding and reaching audiences is why Adconion now calls itself, in part, an audience network. We’ve aggregated a worldwide audience of nearly 300 million unique users, and using our own technology and ad server, have a wealth of very detailed data about these users. Combining this reach with tailored reporting and lots of quality data is incredibly valuable for agencies. Adconion empowers agencies with this formula, enabling rapid optimization, and other networks do and will seek to do the same.

We recently took our focus on audiences and data a step further by creating a deep technological integration with BlueKai, the intent-focused data exchange. This offers agencies even more insight into particular categories of Web users with proven intent from high-quality sources.  An example of the way evolved ad networks will deliver value to agencies is the Adconion Audience Exploration Report, a new product that identifies for advertisers which BlueKai users are interested in or have purchased their products, even if the advertiser is not currently targeting that type of user.

Enriching ad space – which has become a commodity – with data is a major key to the future of online advertising, driving better performance and higher CPMs. The same run-of-network ad unit, with no targeting is far less effective and valuable than the same ad unit powered by behavioral targeting or retargeting. Add rich media video, with the wealth of new information one can capture regarding video engagement, and it jumps again. This is win/win/win for agencies, publishers and the networks themselves.

The New Marketing Service: Content Delivery and Monetization

Of course, advertising also needs to expand into new formats to engage users and drive value to agencies and brands; branded video entertainment is one such format. Last year Adconion launched RedLever, our digital studio, which creates and distributes branded video for agencies. Earlier this year, RedLever developed Shop Girls of Madison Lane, a dramatic fashion Web series, for TRESemmé.  RedLever embodies the content piece of our evolved ad network model, combined with audience reach and understanding.

Indeed, content delivery and monetization is one of the new marketing categories that networks are naturally predisposed to move into. Adconion has Adconion.TV, our video content syndication and monetization network. Launched in Q3 08, it distributed Michael Eisner-backed Vuguru’s Web comedy series, Back on Topps, in addition to combining it with rich media advertising.

Between static ads and video, networks are well-positioned to be “content agnostic,” serving all types of material using the ad network infrastructure. Scale is crucial to unlocking larger video budgets, and coupled with the precise targeting enabled by a traditional ad network structure, there is tremendous opportunity.

Because video consumption online is increasingly fragmented, the majority of video consumption comes from the “push model:” where video content is pushed to web users and not pulled by them from portals like YouTube and Metacafe. Networks can deliver branded video – or any type of content – to Web users wherever they are online, whether it’s email, a social network or reading the news. This type of pushed content will be more discoverable and more compelling to users while simultaneously being tremendously valuable to brands.

This “push model” is like the new online television network: matching audiences with content bundled with advertising.

Conclusion

Ad networks sit at the nexus of brands, agencies and Web users. By leveraging strong relationships with agencies and the technology they already have in place, networks can and will propel the online advertising industry forward, in addition to stimulating the digital economy and pushing advances in content consumption along. To do so, however, they must evolve beyond simply serving ads – which is to say, beyond being “ad networks.”

Online branded video entertainment is swiftly gaining traction among both brands and agencies: as iMedia’s recent branded entertainment survey showed, nearly three-quarters of agencies have used or plan to use branded entertainment as part of a campaign in the next six months. Still, concerns about developing quality content, accurately compiling useful and detailed performance metrics, and – most of all – achieving scalable, targeted distribution are impediments to unlocking truly significant branded video budgets.

Of these hurdles, scale is the single biggest challenge preventing more brands and agencies from either using branded video or allocating more budget to it.  Demand for high quality video, particularly video which is expressly produced for the Web, is far greater than the current supply, which is astonishing in the current economic climate.  According to eMarketer, 80 percent of US internet users watched online video in 2008 – a figure that is predicted to rise to 88 percent, or 190 million people, in 2012.  Accordingly, aligning quality video with a partner that can meaningfully scale distribution to satisfy this growing demand and simultaneously deliver marketers’ desired results is crucial to the continued growth and adoption of branded entertainment.

Push to Scale

“Scalability” is a buzzword that’s often thrown around, but how do we get there?  It’s not through portals like YouTube, branded channels or microsites, though those are all parts of the solution.  It’s by pushing content to users on every part of the Web that we can achieve significant scale. I call this the “push model” of distribution.

By delivering branded video to users wherever they are on the Web, from their email to a social network to reading about last night’s game, that content becomes more discoverable. As it stands, portals and destination sites require users to search out this content on their own – if they have time and remember to do so. Pushing content out to where users are enables them to consume quality video content – which they want – in many more places than they previously could.

Think of the push model of distribution as the new online television network.

Combining Scale with Accuracy

Of course, simply reaching massive numbers of people isn’t adequate – as we know, it’s reaching the right audience in a meaningful way that brands and agencies are looking for. The push model lends itself to targeting based on traditional ad network metadata, including demographics, geography, channels and behavioral targeting, all of which enable the precise delivery of relevant video where it is most likely to be consumed and enjoyed. This method also emphasizes the highly-sought after metric of considerable user engagement.

Indeed, branded video delivered using ad network content serving infrastructure backed by metadata tags is very effective in this regard. For example, Adconion, through our wholly-owned subsidiary RedLever, uses this structure to syndicate Vuguru’s made-for-the-Web series Back on Topps, and the performance data we’ve collected thus far shows that engagement with Back on Topps is well above industry average.  Google, with Seth MacFarlane’s Cavalcade of Cartoon Comedy, and ON Networks, with Smart Girls at the Party, have also made advancements in this vein.

High levels of engagement with carefully targeted users who are active all over the Web – not just on video destination sites or portals – is the most important yardstick that brands and agencies want to measure their branded video campaigns by, and the push model of syndication will deliver the best results against this scale.  Reaching Web users who do not frequent the portals or destination sites will also expose coveted new consumers to brands.

Particularly in the case of episodic programming, careful user targeting ensures that videos are displayed in the proper order – that is to say that the first video in a series is always served to users who have not seen it before, while users who have previously viewed the content can be served subsequent episodes. Brands will undoubtedly find this accuracy attractive, as it allows the brand the ability to sequentially target their embedded ads, providing a superior brand experience and ROI, in addition to increasingly the viewership of a series.

Nuts and Bolts

Today, the push model is based on delivering a branded video experience using rich media ad units that dynamically appear on a page (versus being fixed on the page) and are fully targetable.  The benefit of a targetable video player versus a fixed one is that the marketer is guaranteed that only their target audience is watching their branded video content or pre-roll ad, delivering superior performance. The majority of interaction and consumption comes through these targetable ad units, though content is also added to static players like those found on YouTube and Hulu.

The network of an aggregated audience is the real power here.  A great example is Seth MacFarlane’s Cavalcade of Cartoon Comedy which was hosted on the homepage of YouTube and distributed over the Google Content Network.  From what we can tell, 86% of the 14 million streams delivered during its first three weeks came from the network and not YouTube.com, the destination. Similarly, Back on Topps racked up 2 million views in just 48 hours when distributed across our Adconion.TV targeted network.

Both of these networks demonstrate the power of the push model. Portals, on the other hand, do not offer much in the way of targeting, though they do provide scale. The key is to unite volume/scale and targeting.

Conclusion

As brands and agencies’ focus on performance and ROI continues to sharpen, scalability combined with precise targeting will demonstrate the special value of branded video done right. Moreover, campaigns using distributed branded video will be backed up by a wealth of metadata and detailed measurability showing how much of a video was played and whether it was paused or muted and so on. This superior performance will in turn pave the way for larger campaigns and bigger budgets, which feeds into the ongoing creation of more quality content ready to be consumed by the growing audience of users who are hungry for video – branded and otherwise – online.