ChasNote

Revver has built a cool system for inserting ads at the end of online videos in a manner that allows advertisers to select flight dates and enables content producers to monetize their hits by rotating in new advertisers at the audience for a particular clip grows (see AdAge). Clickable ads run at the end of each video. With the old approach — attaching a single advertiser to a single video clip — an unexpected viral success gave the advertiser a bargain but the content producer ended up underpaid for his or her work. Revver’s technology can even the playing field.
But I worry the model may still underpay the content creators. One, Revver takes 50% of the revenue, even when a viewer finds the video by way of the content producer’s own site; the content producer makes the content AND finds the audience, and only keeps 50% of the money? Two, advertisers are paying only when viewers click on their ads. This works fine today, while the technology is novel and the click-through rates are high. Say an advertiser pays $1 per click and 4% of viewers click through: that’s a $40 effective CPM! But if CTRs on ads in online videos follow the path of ads on websites, in email newsletters, on blogs and in RSS feeds — which all started in the single digits — they may settle somewhere below 1%. At 0.5% click-through, that effective CPM drops to $5, $2.50 to the content creator for every thousand viewers.