Back in November, I attended Ad:Tech New York, one of the key online advertising conferences. Back then, I wasn’t blogging, and now it’s too late for a detailed review of the conference to be meaningful. But I do want to share one insight because I often think about it when I’m meeting companies. I call it the allegory of CommissionVideos.
As I walked the floor, I met a company called CommissionVideos, and I had a very interesting conversation with one of their executives. CommissionVideos provides a very straight-forward service. In their own words, they allow website owners or bloggers to “monetize your site with our high quality videos,” promising CPMs of up to $7. The companies logo and branding says it all. This is a service for maximizing revenue pure and simple. I don’t know if its profitable or not, but CommissionVideos is one of the potential money machines of the web. They are not in the business of providing great services or content to users. They are in the business of driving CPMs – connecting publishers with ad dollars.
But they didn’t start there. They started somewhere else entirely. As our conversation progressed, I learned that CommissionVideos actually began as Voxant NewsRoom, a business which still operates today. Both companies, in fact, are one and the same – although you’ll find almost no evidence of this on their respective websites. Voxant’s offering, the Voxant Newsroom, offers website publishers and blog owners the ability to enrich their sites with top-notch video content. Voxant boasts an impressive customer list including Breitbart.com, Newsmax, the Huffington Post, and others. Voxant provides a high-quality video widget that allows its customers to display selected videos from a range of high-end content partners such as AP, Reuters, AFP, CBS, MTV News, the BBC, and many more. It’s a high-quality service aimed at the high end of the market. The marketing message: we’ll help you make your site more compelling, more engaging, and more sticky by bringing you high quality video content.
The difference in branding is striking – all the more so when you know that this is the same company.
So what’s the moral of the story? When I asked the company how they manage to offer such totally different services, they gave me a very simple answer. Voxant Newsroom is a great service they said, but the market is relatively small. There is a small handful of high-end web publishers, they said, that care deeply about the user experience and is interested in the advanced features and high-quality of the Voxant Newsroom. Voxant has to go and knock on the door of the Huffington Post and Breitbart and sign deals one by one. It’s a small business, and it hardly pays the bills. Customers want special features, they care about look and feel, and their users don’t necessarily click a whole lot.
The vast majority of their customers, they said, were on the other end of the spectrum. Revenue-oriented websites that will do anything to maximize revenues (CPMs). They will deploy whatever advertising units they need to in order to maximize revenue. Yesterday, it might have been DoubleClick or Commission Junction. Today it might be CommissionVideos or Kontera, an Israeli company. Tomorrow it might be something else. These publishers are in the business of acquiring traffic and converting it to revenues – content and quality be damned. They are the lifeblood of the internet. Small sites you and I have never heard of – but lots of traffic in the aggregate. I asked them if they have experimented with semantically targeting videos based on the context of a web page. Yes and no, they said. They tried it, but they realized it doesn’t matter. They know which videos get the highest CPMs, and in most cases – the context of the website doesn’t even matter.
Voxant started in the business of improving user experience – and they ended up in the business of maximizing advertising. This is the difference between the Internet of the Web 2.0 Expo and the Internet of Ad:Tech. The first Internet is the one I love. It’s the Internet of compelling user experiences and brilliant entrepreneurs focused on improving our digital lives through innovative applications. The second Internet is the one that that actually brings home the bacon. Its the Internet where eyeballs are converted into money. It’s the Internet of Google AdSense, Commission Junction, TradeDoubler, and countless others. Voxant didn’t plan on rebranding itself as CommissionVideos, but they did so as soon as they understood where their real market opportunity was. Israeli companies such as 5min and Qoof have totally understood this reality and are acting accordingly.
The moral of the story for VCs and entrepreneurs is this: Even if you start life as Voxant Newsroom, you might end up as CommissionVideos. Why? Because that’s where the money is.