Podaddies is a new online video ad network that focuses on placing ads with iTunes podcasts, blogs and P2P (peer-to-peer) networks. “Online video, including user-generated video and downloadable video like podcasts, is growing more quickly than anything else online,” according to Nate Pagel, Podaddies founder and CEO. In this week’s iChat, Pagel discusses the new network, the growth of podcast advertising and how the network differs from competitors who are playing video ads with downloadable content.
iSPOT: Please provide background on Podaddies and how you developed it.
Pagel: It’s an online video advertising network. We pair up advertisers and agencies that are interested in reaching people they haven’t been able to reach in the near past and certainly in the future with online video publishers and large publishers that have video podcasts. It’s an important area we’re reaching because it covers user-generated video sites as well as stuff that’s available for download. Every major publisher has a video podcast; you can check through iTunes to see who has them, so all major publishers are our potential market. We can help them add trackable video advertising. As we grow, we’ll find out about specific demographics and we can target the demographics for advertisers.
The company was founded in January 2006, we went beta in October 2006 and went live in December 2006. We’ve been around a little while and we have revenue and customers and recently announced financing. We’re a growing company and we’ll be making a lot of announcements this year. Right now we’re just on a few sites, working with a few people, but we’ve go a lot in the works for Q4 this year.
iSPOT: Are you working with advertisers and publishers?
Pagel: Yes, you can think of us as similar to Doubleclick. They sell advertising and have technology and they represent publishers. We do all those things as well. We’re a tech company, but we represent sites and work with agencies and advertisers to get appropriate kinds of advertising onto our network.
iSPOT: We’ve read that you don’t like pre-rolls and you’d rather play post-rolls. Is that what you’ll do?
Pagel: There are likes and dislikes and then there’s running the business. Ultimately, I have certain ideas about what’s appropriate and not. We’ve watched the explosion of user-generated content in the last few years, with YouTube and other sites. It didn’t happen before and there’s a lot of tech reasons for that: broadband adoption, hard drive size, speed of computers, codec tech getting better. Part of it is because advertising has gotten out of the way so people can get in front of content. It’s about doing appropriately targeted ads the users don’t mind. Independent video producers don’t alienate their audience. Thirty second pre-roll spots have been a standard for awhile, but it’s not something users are loving and there’s other more appropriate forms of advertising for the short form content that’s available out there. Thirty second pre-roll might make sense if you’re watching a TV program but the content is shorter form that we’re approaching. Some podcasters do longer formats but that’s a separate story.
iSPOT: If you’re going to serve ads with podcasts, what can you say about the state of podcast advertising and where can it go with your help?
Pagel: It’s at a nascent stage right now. Our business got started in ’05, when Steve Jobs was on stage to show the new video iPod. He showed two video podcasts, one was Rocketboom and the other was Tiki Bar TV. It occurred to me at that moment that those two publishers weren’t getting paid for their content. There was no way it was being tracked and no way to serve ads with it, so we stated building the technology in ’06 to do just that. We started doing it with post-roll ads that were clickable. That was our first product and we expanded from there. But I think with podcast advertising what we’re going to see for shorter form content is a little bid of mid-roll and definitely some post-roll. If it’s longer form, we’ll see a little bit of pre-roll but ultimately it’s up to the publisher and advertiser. We can do any of that but it’s a question of marrying the interests of what is out there with the advertiser and tracking it so we can go forward. We’re testing the effectiveness of different ad links and click through rates and we’re also seeing folks like Nielsen who are not quite getting into this space but they’re not too far off. So we’ll get more data about usage and spread and popularity. It’s a new space, an exciting time, not quite the Wild West, but time for us to experiment. Podcasting started fairly recently and it’s taking off but it’s not mainstream so it’s a good time for us to experiment and see what works best.
iSPOT: There was news about your deal with Apple.
Pagel: We’ve been working with the iTunes and Quicktime groups at Apple.
iSPOT: Would this be an opportunity for them to incorporate advertising in these products?
Pagel: They have explored advertising, but unlike Microsoft, they’re not an ad company at all. They don’t even have advertising on their website. I think they’re interested in us because we provide additional technology for the Quicktime format so people can track it. We’re adding that capability to folks with Quicktime files.
iSPOT: Would it permit Apple to play ads in a new way?
Pagel: It would permit it but I don’t think they want to do it. If you open iTunes, all the podcast publishers are our potential clients. Using our technology, they can do it. Some of these folks can call Apple and they can tell them to talk to us. But there’s no official partnership between us and Apple.
iSPOT: How does your service differ from competitors who have similar offerings, like Kiptronic and YuMe network?
Pagel: Everyone’s a little different in this space of start ups. Kiptronic and YuMe have a Windows Media solution and we have Flash and Quicktime. Kiptronic started out with audio ads and customer insertion of audio streams. They announced a video product but I haven’t seen it yet. YuMe is really focused on Windows Media video and the P2P space, which we’re in as well but were not doing Windows, we’re doing video and Quicktime and podcasts. None of the other companies are working with Apple. We’re not specifically targeting Apple but we built it out so it works in iTunes and iPod. The other companies don’t have products that do that, so it’s a different approach and different technologies.
iSPOT: Can you mention some of the publishers and advertisers you’re working with?
Pagel: I can mention who we’re working with today. Two of the publishers are Blip.tv and Guba–we’re live with them. Blip has Quicktime films and Flash files and you can subscribe to it in iTunes and MySpace and download it through your hard drive and we have a downloadable media solution live. As far as advertisers go, we have a company called Therative, which makes skin conditioning products.
