Eyewonder’s New Out-of-Banner Video Units

Eyewonder has launched six new video ad formats in response to customer demand for more creative flexibility in deploying their video assets.

The new units include multi-layer ads, expandable ads, floating ads, “pop-out” ads, pop-up ads and video ads embedded in AOL’s instant messaging client.

Up until now, the online video pioneer’s only packaged formats were what’s commonly known as in-banner: video streaming in the page, usually in a conventional IAB-endorsed unit. The new units allow for a much greater range of creative control, including interactive features such as clickable tabs and expandable windows.

Deployments of the new offerings have already begun. America Online (AOL) and Yahoo have made three of EyeWonder’s formats — video banners, video multi-layer and video pop-out ads — available at no extra charge over their regular rich media rates. Several advertising clients are also using the new units, including most notably Motorola, which is currently running a European campaign using an Eyewonder expandable ad.

“It’s a very big deal for us,” said Eyewonder CEO John Vincent. “The companies we’re working with want to use one vendor.”

While Vincent points to customer demand as the main driver of its new offerings, the company’s move was also likely motivated by the expanding range of units available from many third party enablers of online video. The list of video options newly available to online advertisers in 2004 is long and growing longer. It includes MSN’s new in-stream video ad offering, Unicast’s pre-cached video commercial in Windows Media format, and new solutions from Viewpoint.

All the buzz speaks to a very different marketplace for the medium than was apparent a year ago, when Eyewonder was one of only a few firms advocating video ads, and relatively few video campaigns were hitting the Web. In fact, Eyewonder said it has been quietly testing the new products and offering them through partner relationships for some time, and now feels the market is ready for an official introduction.

Eyewonder’s arguably late-in-the-game expansion of its video palette reveals a company that may have been caught unawares by a period of rapid growth, according to Nate Elliott, associate analyst at Jupiter Research.

“They’re playing catch-up,” Elliott said. “The fact is [other players] already offer these products. They’re late to market.”

It’s a bit ironic that Eyewonder is playing the laggard in online video, since the company was one of the early entrants to the space, offering products to support the transfer of offline video assets to the Web as early as 2000.

According to Vincent, the company has been consistently growing, despite an unclear demand for video ads as evidenced by the relative paucity of competitors in the space up until recently. Vincent reported Eyewonder’s served impressions in 2003 were up 150 percent over 2002, and in 2004 he’s forecasting growth much beyond that.

“We served two billion video impressions last year; this year we’re looking at the four billion range,” he said.

Eyewonder’s new out-of-banner products will force it to compete with companies it has traditionally partnered with, companies such as Eyeblaster and PointRoll. The future of these partner relationships is now unclear.

Meanwhile, the company will likely continue to fight for market share with competitors like Klipmart, which has long offered a product that supports ads and other content in Flash. Another competitor is Macromedia itself, whose Flash MX product now supports streaming video.

Indeed, Eyewonder seems to be positioning its product more as a competitor to Flash-embedded video than to some of the newer formats, such as Unicast’s Video Commercial. This is partly because Eyewonder’s video ad products more closely resemble Flash in terms of where the media is placed and the video quality.

“Eyewonder is designed to be able to load to any bandwidth and in a specific location,” said Vincent. “A Unicast unit that downloads in the background has such a small number of actual plays that they’re not able to serve the advertiser demand that’s out there. It only helps us.”

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