AOL entices users to watch its videos by giving away free stuff—not that there’s anything wrong with that.
The company’s budding syndication arm, AOL On, distributes content to Swagbucks, a rewards site where users earn points that can be redeemed for gift cards and coupons ($1 off Tombstone Pizza, $15 off at the Gap). To collect points, users participate in polls, play games and watch videos. Some of those clips come from AOL brands like Moviefone, PopEater, AOL Music and AOL Healthy Living. Others are by way of AOL license partners like Reuters (including the clip “Rival Libyan Militias Clash in Tripoli,” preceded by an ad for the new Microsoft Surface) as well as Mashable and Food Network (snippets from 30 Minute Meals With Rachael Ray).
AOL opened some eyes during its most recent earnings call when it reported that video ad revenue will jump from $10 million to $100 million this year. That growth can be attributed to its growing syndication footprint, born out of the 2010 acquisition of startup 5min Media.
According to 5min founder Ran Harnevo, who is now AOL’s svp, video, Swagbucks is a new test partner that represents just 1.5 percent of the company’s video volume.
“Incentivized views is something we are still trying to assess,” said Harnevo. “It is not a core strategy for us, nor something we deliberately avoid.”
Prior to AOL’s acquisition, 5min was built on seeding short-form instructional content across the Web. But now Harnevo and his team have developed a premium video syndication powerhouse, distributing content for the likes of CNET, BBC and Martha Stewart Living Omnimedia to sites from Toshiba.com to Answers.com and Salon.
Given its A-list lineup, it is curious that AOL would even bother with Swagbucks. Isn’t rewarding (or, some might argue, bribing) users to watch your videos in conflict with delivering authentic, engaged video viewership?
Not necessarily, say proponents. “There’s really nothing wrong with loyalty sites,” noted Mitchell Reichgut, founder and CEO of Jun Group, which sells incentivized video views to brands like Dove and Coca-Cola. “Nobody watches videos on many small sites, so incentivized is the only way to drive engagement. Everybody’s doing it, and nobody’s talking about it.”
Adam Kasper, evp, partnerships and investments at Havas Digital, said he is OK with the concept, as long as AOL is upfront with its advertisers and Swagbucks takes measures to make sure viewers are actually watching its videos.
“As long as it’s priced and sold in a way I know what I’m buying, I can see value in it,” he said.
Some warn against the practice, however, considering the risk of repeatedly reaching consumers who are more interested in coupons than in content.
But others argue that most content provides some kind of value exchange between brands and consumers. Said Art Zeidman, president, business development at Unruly Media: “It’s not like I’m asking to watch a Kraft ad before Modern Family.”