With AOL Canada as its first partner, the Toronto-based company will be rolling out its Video Fade technology in the coming months, a proprietary technology that was patented in the U.S. in September 2012.
Instead of running 30-second advertising videos before playing the actual videos, which is usually the case for consumers who click to watch a video, Video Fade temporarily shows advertising on screen. It surrounds the video in its frame on a web page, but it doesn’t interrupt it or play before it. Viewers can choose to either ignore the advertising around their video, or they can click to see more of the ad content before it eventually fades away as the video keeps playing. See an example of Video Fade here by clicking the link and hitting “play” on the video.
Either way, the advertising doesn’t distract them from watching the content they came to see, says Chris Pavlovski, CEO of JMG.
“Viewers get drawn to the advertisement, but not necessarily annoyed because they have the option to continue looking at their video … As a user, and being someone very immersed into the video space, [I] never really liked pre-roll commercials,” he says, adding that those 30-second spots playing just before videos also didn’t seem monetize that well.
“And at the same time, it seemed to be a very annoying ad format for the user experience. So we wanted to find something that would work for all parties – the advertiser, the publisher, and the user.”
Based on testing on their own channels, Pavlovski estimates Video Fade generates a click-through rate of about three to five per cent – something he says advertisers typically don’t see with the 30-second commercials appearing just before consumers get to access their videos.
While JMG plans on eventually rolling out Video Fade to all its clients, Pavlovski says the company’s core business comes from using a platform called Goodio. The premise is that anyone can download the mobile app, upload video to it, and then wait about 24 hours for Goodio’s algorithm to place a value on the content. For example, a funny video is typically valued at $200, Pavlovski says.
Goodio then makes an offer to purchase the user-generated content, curating it for clients like Quebecor Media, Postmedia Network Inc., Yahoo! Inc., Bell Media, and Shaw Media, as well as sites by Microsoft Corp. such as Xbox and MSN. Those clients will then licence and embed the videos onto their own sites.
For Pavlovski, these models of video advertising and content generation is the best way to continue to supply publishers with content, while giving consumers what they want. He adds that JMG used to work in the email advertising space, but two years ago, the company of 11 employees dropped that business model in favour of pursuing a video strategy.
“Video is just going to get bigger as broadband and high-speed capabilities improve,” he says. “The market is heading into video … As TV and the Internet combine, this is the future of conversion.”
JMG created this video to entice video creators to upload their content to Goodio: