Thursday, May 03, 2007
OnHollywood: Getting High CPMs from User Generated Content
Sites such as YouTube have tremendous traffic, but making money is difficult because the CPMs for videos of skateboarding accidents are so low. DaveTV is carving out a niche by developing high CMP sites heavy on user participation that expand the reach of known brands."In user generated world such as MySpace, CPMs are 50 cents or less. YouTube is getting maybe $5, according to Rex Wong, CEO of DaveTV. His company (which I at first thought was just another upload site) focuses on packaging video and community to increase traffic to known brands and media sites. Wong said he has been getting $30 and higher CPM for video on a branded site, and $6 for banners.
DaveTV has worked with MGM to build a site for the Stargate TV show, and advertisers are willing to pay more because it is a known demographic. The site enables visitors to create video mashups of show clips, to produce parodies, and to rate and comment on content. DaveTV also developed Hook.tv, a site dedicated to fly fishing. To make sure advertisers are comfortable with the UGC, DaveTV filters content to make sure it is not offensive. "With a trusted brand, advertisers are more confident in what they are getting more than a UGC site."
To drive traffic to the vertical sites such as Hook.TV, before the site launches, DaveTV identifies the top "alpha" bloggers that are interested in the vertical. "Blogs are where you go to get traffic, and press releases are where you go to get credibility," Wong said. They also submit videos to YouTube and search engines such as blinkx to makes sure the videos get indexed.
This all makes sense, and DaveTV is smart to avoid trying to compete in the wide open and as yet unprofitable area of user generated content sites. Established brands with proven demographics will have the advantage over startups in generating revenue.
Posted By John Gartner at 01:34 PM
Permanent Link: OnHollywood: Getting High CPMs from User Generated Content
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