ClipSyndicate, the video news syndication service that launched in April 2006 and is operating in beta, is providing a platform for broadcasters and other content owners to play their video clips across a network of sites, with both parties sharing the ad revenue. The service enables publishers to extend the reach of their content and monetize it, while enabling advertisers to play their ads in a highly targeted environment. Sean Morgan, ClipSyndicate’s CEO, explains how ClipSyndicate plays ads across content categories that achieve high CPMs in this week’s iChat.
iSPOT: ClipSyndicate provides a way for broadcasters to monetize their clips, publishers a new source of content and advertisers a highly targeted audience.
Morgan: ClipSyndicate has built a video syndication platform for licensed video that aligns the business interests of the three constituents–vertical websites that are in dire need of a simple end to end solution to search for, find and syndicate highly relevant video news segments on their websites. It aligns the business needs of broadcasters and other owners of video media assets that are interested in monetizing their pre-produced assets in the long tail. Broadcasters are typically in a DMA, a designated market area. With ClipSyndicate they get to extend their brand into the long tail to websites that in no way cannibalize their core offering in their DMA, but extend their brands to markets they’ve never been in and drive incremental revenue from assets that have already been created. Advertisers have a great opportunity to deliver video ads in front of target rich websites. It’s a perfect storm happening here, you mount on top of it the fact that networks are taking their best creative content and putting it online downloadable for consumers. When that happens, local broadcasts lose eyeballs and advertisers lose eyeballs. They’re going to retain those eyeballs in the long tail.
iSPOT: How many content providers and websites that play the content are involved?
Morgan: We have licensing agreements with almost 300 affiliates of ABC, NBC, CBS and Fox and additionally we’ve recently signed partnership deals with Bloomberg TV, the Associated Press and The New York Times. Some of our website partners are American Nuclear Society, News of the Odd and the PennWell Dental Group. We have about 300 content providers and 150 websites participating.
iSPOT: Publishers can place content on their own sites. What’s the advantage of working with you?
Morgan: I founded a company in 1996, Screaming Media, brought it public in 2000 and it was purchased by CBS MarketWatch. It was the Internet’s largest text syndication network. We partnered with close to 2000 text news providers and brought in a quarter million text articles a day. When sites like Construction.com or Fireengineering.com are looking for a robust amount of text articles for their website, there is not one text news provider that would satiate their need. It takes an aggregation play to be a viable solution to give them a robust enough amount of content to be compelling. We provide an end to end solution that covers video searching with all the technology and all the ad sales.
iSPOT: When you sell advertising, you don’t sell it on behalf of individual sites, you sell it across categories.
Morgan: We reaggregated the long tail into approximately 100 robust ad networks. When sites register with us, they define what type of website they are and choose from categories and subcategories to let us know what they publish and the demographics of their users. Sites tell us which categories best describe them. Let’s say we have 5,000 web sites that checked off health, 3,000 that checked off health with a subcategory of women and 400 that check off health, women and fitness. When an advertiser comes in and says we want to get our video out in front of women 18-35 who are interested in fitness, we say that’s great–we have 5000 sites in health, 3000 for women and 400 for fitness so we’ll give you blended CPM so you get top line across health vertical. They’ll get one CPM rate for health and women and for sites down to fitness we’ll give them a blended CPM that allows the advertiser to benefit from what we’re doing by reaggregating the long tail into the categorical ad networks.
iSPOT: When the clips play, they’re on a ClipSyndicate player.
Morgan: They play through our player so the site doesn’t have to host anything.
iSPOT: What kind of ads play?
Morgan: Most advertisers run their ads in categories that make sense for them. It’s very interesting in as much as advertisers are losing local eyeballs in local affiliates of their DMAs. They typically pay $5-7 CPMs which are very low but you expect that because of the broad spectrum of viewers who watch TV in a local market. If you’re selling Pampers, you don’t know how many expecting mothers are there. If you’re Pampers and you do a buy in our parent category, you increase your percentage of targeted eyeballs and they pay very handsomely for that. Vertical websites have CPM rates that range from $80-$120. You’re going to pay a lot of money to put your ad on Contractor.com as opposed to putting it on an ABC affiliate in Savannah.
iSPOT: You announced agreements with Tremor Media and SpotXchange.
Morgan: Our partnerships with them help up streamline our business. It’s a very nascent industry. Broadcasters are total believers in what we’re doing and websites love the efficiency of point, click and publishing clips to their sites, so we did our deals with Tremor and SpotXchange. When a consumer clicks on a clip that’s been syndicated, it makes a call to pop our player up, then we pass the variables of that clip to SpotXchange. It’s all done on the fly. We say it’s about to play, here is some metadata, what relevant ad do you have for us and what’s the CPM? We go to Tremor and ask them the same thing. We build an algorithm and decide which ad to take in to play for the consumer. It’s the way to optimize ad deliveries. Any business like this with contextual ad delivery gets stronger when the business is moving its scale. We’re going to deploy our own internal ad sales group when the business does approximately 10 million streams a month. It makes sense to bring it in house but we’ll keep strong ties with our partners to do back fills.
iSPOT: Who determines the CPM rates that are charged?
Morgan: We don’t do any of our own ad sales so we take what they give us. It’s all been an exercise in learning the market and being able to derive lots of information about usability of our platform and consumer experience with our player. Our player is like a floating cable box, we’ve stuffed it with other channels. We’re doing analysis so if a user comes in from a pet website, they’re watching a pet clip and they put that drop down and go to business news. We know they’re a pet owner but now it’s a pet owner that likes business news so do we deliver them a Petsmart ad or a subscription offer for the Wall Street Journal. We have to strategize the development of the ad matrix of people coming in from vertical websites and traversing to other categories of content within our player.
iSPOT: When do ads play?
Morgan: Now we’re putting post-rolls in there. It’s kind of pre-roll on the next clip that airs. We don’t want to dupe consumers and give them an ad before they watch a three-minute piece of content. Vertical websites want to brand their own TV station so when users click they watch the clip, then an ad will air, then it will play other related clips that have been syndicated so they can watch many of the most recent clips. It’s pretty extraordinary.
iSPOT: How do you think growth in the amount of video that plays on the web and consumer broadband access will enable you to grow?
Morgan: Two and a half years ago it wouldn’t have made sense to launch a business like this. It was a pay to play marketplace then. With advancements in all the ad delivery technology, it’s a prime opportunity to be delivering video to consumers. All the metrics of consumer video watching on the net are ratcheted up and all the analysts keep increasing their estimates on the overall video ad spend through 2010. So all those things are thumbs up, but nobody should get overly excited. There’s some phenomenal start-up companies with ad technology but interactive agencies don’t have the creative ready to go for layover ads. They’re having a hard enough time carving :30 TV ads down to :15s for the web. It’s going to take time but the creatives are starting to embrace the new ad delivery technologies so it’s going to be a robust and exciting marketplace.
