Video Ad Firm Adap.tv Launches to Serve Direct Response Advertisers

Unlike most Web advertising, video is usually considered a venue for brand advertisers, but just-launched video ad platform Adap.tv aims to give direct-response advertisers a place in video content.

The firm is unique in its relationships with Amazon and Shopping.com, which essentially reduces the need to seek individual advertiser clients. Products from those ecommerce databases will be displayed while clips from video content partner Metacafe play. Like others with similar ad offerings, Adap.tv is providing an alternative to pre-roll, the dominant video ad format.

Rather than wooing several individual advertisers to the platform, products listed in Amazon’s and Shopping.com’s database serve as ready-made ads for Adap.tv. The company is also partnering with an unnamed search ad network to feed text ads into its platform.

Because these partner databases already house millions of potential product-based or search ads, the system at launch will have access to about 100 million ads that could be delivered, said Amir Ashkenazi, Adap.tv CEO and co-founder, and a co-founder of Shopping.com. In this way, the Adap.tv almost acts as a network affiliate.

“Large product catalogs are ideal for [the platform],” said Ashkenazi.

Shopping.com is opening its entire product catalog of nearly 60 million items to Adap.tv, according to Wendy Sept, Shopping.com spokesperson. “This is our first foray into working with someone who’s monetizing video,” she said, noting her firm will share ad revenue with Adap.tv through the arrangement.

The platform delivers a series of contextually-targeted and optimized ads that emerge from the bottom of the player, briefly resting below the video content as it plays. The technology creates a transparent layer above the video screen, and displays either a text-only unit or text alongside a product image. When clicked, the small ads pause the video content and launch a new browser window that displays the advertiser’s landing page.

“This is less high design, but more of a high-volume play,” said JupiterResearch Analyst Emily Riley.

Adap.tv is among a handful of video ad companies experimenting with non-pre-roll video ad formats. Video ad targeting and delivery technology firm ScanScout offers a unit that allows advertisers to link to external sites, or lets users click to view an advertiser video ad on-demand. These so-called “ticker” units are also offered by VideoEgg and PointRoll.

Most of these new formats aim to provide an alternative to pre-roll video ads. However, by incorporating rich media components like video or Flash animation, Adap.tv’s competitors’ products are geared mainly towards brand advertisers.

“It is essential to find a business model for online video,” said Ashkenazi, who believes pre-roll ads are not user-friendly.

It remains to be seen how users will respond to these ticker formats, since they’re reliant upon video watchers interrupting their viewing to interact with an advertiser brand. “Publishers don’t want people to click away before they’ve finished watching a video,” said Riley.

Even if users don’t respond to the ads as they’re served during video play, they have the chance to do so once the clip ends. After the content runs its course, each ad served within that particular clip is presented to the viewer within the player. Competitor offerings enable similar features.

Though most ads delivered through the platform will be sold on a CPC basis, CPM and CPC buys are also available. The system targets ads contextually based on video content metadata, speech recognition, and video interconnectivity. Like Google’s AdWords system, Adap.tv’s platform eliminates ads that aren’t performing well, and optimizes ad targeting based on user interactions.

“If we’re not sure it’s the right ad, we’re simply not going to display anything,” said Ashkenazi.

User-generated video site Metacafe, Adap.tv’s first content partner, will run the ads in videos in its travel and video game related content, according to Ashkenazi. Adap.tv will share revenue with publisher partners, though Ashkenazi wouldn’t disclose details of the agreement with Metacafe.

“Publishers get the majority of the revenue; I can tell you that,” he said. Publishers also have ability to choose ad frequency, look and feel of the ad unit, and advertiser sources. The platform works in conjunction with Flash versions 8 and 9.

Despite Adap.tv’s early direct response advertiser focus, both the ad firm and Metacafe would like to branch out in the future to serve brand advertisers through the platform. “The really big thing from my perspective is what they can do for brand advertisers,” said Metacafe VP Sales Mort Greenberg.