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New video ad pricing model based on user engagement.

By Andrew Redfern @ 21st February 2008 10:50 am

VideoEgg Inc a leading online video advertising network has revealed a new pricing model based on user intereaction instead of mere page impressions.

The company specialises in targetted video advertising on social networking sites and made a press release yesterday :

To date, advertisers buy online inventory based on impression, spending a set amount per thousand delivered views, what’s known as CPM. While CPM provides reach and potential, it lacks accountability and forces a high level of risk onto advertisers to determine ad effectiveness.

AdFrames allows advertisers to negotiate a price for engagement, a more valuable indicator of consumer interest, and an approach that will help reframe the focus of the industry from quantity to quality.

“Advertisers need to move beyond the metrics of eyeballs and evolve from ‘how many’ to ‘how good,’” said Troy Young, CMO of VideoEgg, the company that pioneered the video ad overlay.

“AdFrames leverages our keen understanding of how to drive engagement with innovative ad units and takes risk away from the advertiser. It offers advertisers a predictable approach to distributing highly targeted video and rich media content.”

Microsoft will be one of the first companies to use AdFrames and to benefit from VideoEgg’s accountable brand advertising model. The company plans to use AdFrames to distribute video content promoting Microsoft Office.

The product is a natural fit for the marketing program, offering a systematic solution to push out Microsoft’s long-form, entertaining brand content featuring comedian Amy Sedaris. The ads will run across the Eggnetwork which includes hundreds of social sites and applications.

“VideoEgg’s AdFrames approach allows us to deliver high-impact video messaging to an engaged audience, helping us to reach our media objectives, effectively and efficiently,” said Jamie Conner, Media Manager with Microsoft.

The AdFrames solution distributes video or rich media through an innovative, expandable ad unit that can be dynamically formatted to fit any size on a page, widget or online game. This flexibility will enable publishers to better integrate the ad message into their environment.

Importantly, Adframes will align incentives across the delivery network by compensating publishers on user engagement. Engagement doesn’t begin until a user rolls over the ad, and the AdFrame Invitation has expanded into an overlay. AdFrames includes a countdown during the roll-over to ensure the user is not engaging with the ad inadvertently.

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