Advertising on User-Generated Video

Hitwise reports visits to YouTube increased by 70 percent from January to May, when its share of the domestic online video market hovered at around 60 percent. The next largest video site, MySpace Videos, had a comparably measly 16 percent market share in the same month, followed by Google Video with 7.8 percent, Yahoo with 2.7 percent, and MSN with 2.09. Is it any wonder, then, user-generated video content has become synonymous with YouTube?

User volume aside, YouTube is a leader in its segment because of its advertising model. Encompassing custom channels and user-rated video ads, the site offers manifold ways to integrate advertising content and display it in a prominent fashion.

So does another user-generated video (UGV) site that’s quickly amassing an impressive roster of client brands. Launched in 2000 and originally an e-mail marketing company, Toronto-based Jokeroo predates most modern video sites. But it hasn’t relinquished its e-mail roots. Its user-generated content is delivered to subscribers free of charge daily and is strictly focused on humor.

That seems to appeal to a broad audience of Internet users. According to comScore, the site was ranked the fifth largest video portal in the humor sector in June, with an average 2 million users, 80 percent of which are based in the U.S.

As with any video site, part of the criteria by which we assess it as a potential advertising partner is content quality. Problem is, user-generated content tends to vary as much as the users who submit it. One indication of its worth is the presence of syndication partnerships; if other sites are interested in a video portal’s content, odds are good consumers will continue to be, too. Straddling the U.S. and Canadian markets, Jokeroo currently has content syndication partnerships with AOL and Quebecor, parent company of Canadian portal, for which it provides the Comedy section content.

Like competitor YouTube, Jokeroo is big on integrating ads. Among its offerings are the Fade Out, a full-page skin highlighting a branded video player that fades to reveal the Jokeroo page, and the Video Crawl, a branded image that appears in the lower bottom corner of the video player, akin to the audio and video in-program overlays seen on MTV and VH1. Both were recently employed to promote the film “Transformers,” as was the Jokeroo Custom Contest promotion, which encouraged site users to submit a video of something they had “transformed.”

Entertainment advertisers interested primarily in preroll inventory can look to a recent Sony Pictures campaign for a sense of their potential results. A promotion for the film “Perfect Stranger,” which incorporated :30 preroll ads with companion banners, generated click-through rates upwards of 2.5 percent. Other Jokeroo clients have included Honda, Molson Canadian, and Procter & Gamble.

The site also offers integrated headers and standard fare like banners approved by the Interactive Advertising Bureau. In the works is a content ad that will allow clients to incorporate branded videos into Jokeroo’s e-mail newsletters.

According to Jokeroo, its objective is to keep users and subscribers on the site. While at first blush this seems to fly in the face of advertisers’ goals, such a mantra can actually be beneficial to Jokeroo clients. It encourages advertisers to offer more comprehensive, relevant content within the ad itself, thus decreasing the need for consumers to leave the page. The approach has been known to increase brand and product interaction rates, while scoring high with Internet users unwilling to abandon the site they actually came to see.

Competing with YouTube for traffic outright isn’t an option. Competing for advertisers may be. Jokeroo’s slant on integrating ad content is as fresh as its videos.

And that’s no joke.

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