Call it bribery or call it brilliant. Either way, it looks like paying people to watch online video ads (with virtual currency, not cash) is getting bigger.
About a year ago, the social commerce vendor TrialPay introduced a social video ad model, which rewards players of popular online games with Facebook Credits or virtual goods for watching video ads. Now TrialPay is partnering with video ad/analytics platform TubeMogul to bring real-time bidding to social video for the first time, potentially bringing more buyers to the emerging social video ad space.
The deal, which becomes official on Thursday, melds TrialPay's powerful position within Facebook (the company is Facebook's exclusive transactional partner for its virtual currency) with TubeMogul's brand advertisers, analytics and technology.
"It's the flip of the Hulu model or TV model. Normally, I don't want to watch advertising, but I put up with it so I can actually get my content," said TrialPay CEO and co-founder Alex Rampell. "But, in our world of social gaming and very low-cost digital content, I want more advertising because as I engage with the ad to learn more about the brand, I am actually rewarded … in a virtual currency that I care about."
About 200 million Facebook users play social games each month. Given that reach, Rampell said demand is growing for premium video and ways for brands to engage with users.
"[With] TubeMogul … we're able to reach all of these users when they're playing a game and figure out the inventory we show them," Rampell said.
Thus far, scaling a video campaign on Facebook has been a difficult process, said TubeMogul CEO and co-founder Brett Wilson. While brands have been integrating with social games, he said, they've had very little visibility as to which platforms and games their ads are appearing in. They've also had little ability to target their audiences, he added.
"Social video, to date, has been a complete black box," he said. "What we did is we made that inventory real-time biddable, which makes it transparent."
Through TubeMogul's comprehensive dashboard, advertisers can cherry-pick from about 200 games on Facebook and target super specific audiences using both first- and third-party data. (In the future, advertisers could use the platform to target gaming audiences beyond Facebook.) On the back-end, advertisers can see exactly where their ads are running and performance metrics for their campaigns.
While bidding platforms have driven down the value of other kinds of ad units, Rampell contends that social video is a different kind of inventory.
Unlike companies that serve preroll video elsewhere on the Web, TrialPay doesn't charge advertisers on a CPM basis, but only for fully viewed ads, Rampell explained. Also, the ads are only seen by those self-selecting into the process—presumably those with an actual interest in the content and, potentially, an intent to buy. Beyond that, Rampell argued, social gamers are in an engaged, lean-back mode—precisely the kind of state that's receptive to two- to three-minute ads.
The expanding supply of preroll has made it a "race to the bottom," he said, but that's because, unlike social video, it's a "nondistinguishable type of inventory."
In a survey conducted by KN Dimestore, TrialPay and TubeMogul's private beta revealed that the in-game ads lifted several brand metrics. According to the companies, brand favorability was about 14 percent higher among those exposed to the social video ads and awareness increased about 22 percent. Purchase intent was up about 4 percent and message association was about 16 percent higher.
Average completion rates for the social video units vary by category and length, the companies said. But for videos 60 seconds or longer, completions are about 86 percent and longer videos average 61 percent.