Wednesday, February 6, 2008

Monetization of User Generated Video

I caught up with Kevin Barwin yesterday. Kevin is the Vice President of Business Development at Overlay.tv.

The Ottawa based company is getting ready to launch a technology that I think, will have great impact on enabling individuals and publishers to leverage user generated content and boost affiliate marketing networks.

As suggested by its name, Overlay.tv is a solution that allows users to create hot spots on their videos and photos. The hot spots are visible when users interact with the video or photo content and link back to anything from personal profile pages on Facebook to transactional sites like Amazon, iTunes or Expedia.


The solution is also targeted commercially, allowing larger publishers to hot spot their content and create new revenue streams.

Past attempts to monetize video content fell short in delivering targeted content and in truly integrating with the content. Players like Adap.tv largely use contextual ad serving via tagging as a marker for video content and ads tend to appear at the bottom of the screen. Kevin pointed out that the contextual gaps have led to some disconnects like videos about scuba diving leading to pet foods stores. While Overlay.tv’s technology will ultimately be at the mercy of its users (contextually speaking), it will have far greater potential to put accurately targeted buyers and sellers together.

Overlay.tv will officially launch on February 14 with over 750 affiliates for users to choose from. The company just announced it's completion of a $4.6 million Series A financing round.

Here’s a detailed walk through from a user perspective:
  • Avid scuba diver blogs about diving and has hundreds of connections online based on this affinity.
  • Scuba diver uploads video from Belize to show off the sea horse spotted in the coral.
  • Diver creates an overlay and begins to hotspot items on the video (snorkel, swimsuit, location)
  • Diver self selects from a library of affiliates in creating the overlay. Let’s say Expedia for location.
  • Viewers scroll over the items and are able to get deeper information or purchase opportunities of the hot spotted items.
  • Diver generates revenue from lead to Expedia and shares revenue with Overlay.tv
On the publisher side, Overlay.tv will be white labeling its product and aside from fees generated through customization services, it will be creating revenue sharing opportunities across major media properties.

Thoughts/Challenges/Opportunities

Adoption
Time will tell if consumers will adopt the monetization of their content using this type of solution.

Affiliate Marketing
Its proper execution will have a tremendous impact on boosting affiliate marketing networks through social media.

Saturation/Best Practices
Learning from Facebook’s nutty Vampire scenario, Overlay.tv will have to monitor feedback on user experience and audience reaction. It will definitely need optimizing to insure content is not compromised. Best practices will need to be shared across its network of users.

Offline Lead Generation
Inserting a layer of sophistication for couponing and Voip could give Overlay.tv and other players in this space potential to generate measurable (monetized) leads efficiently offline through video.

Local Search
This could create a whole new aspect to local media and how local retailers might employ the use of video within their local search listings. The flexibility offered by the product creates an opening for businesses that traditionally, may not have found much value in video ads.

Online Video Advertising Stats
  • In November 2006 (predating the social networking mania), eMarketer predicted that by 2010, the online video advertising expenditure would become a $3 billion industry.
  • Here's a great piece from Mark Hopkins at Mashable covering a Burst Media study on the subject of consumers and their interaction with online video.
In closing... Happy Valentine's Day Amazon!!!

3 comments:

Olivia said...

I have spent the entire day researching various competitors to Overlay for an analysis paper on companies monetizing online videos through product placement tags, and i have to say that this was one of the smartest and well put articles i read on the topic. Thanks!

Sonia Carreno said...

Thanks Olivia, it was a fun topic to write about. Good luck with your paper. I'd love to hear your insights...if the spirit moves you!

Blogger said...

If you are looking for a solid contextual ad company, I suggest you try PropellerAds.