A three-year-old San Francisco, Calif. startup you’ve probably never heard of is now the seventh biggest video property on the Web.
In fact, according to comScore’s latest video report, in July Sharethrough reached 97 million unique users. That’s nearly four times as many as Hulu, and close to double Facebook’s, Yahoo’s and Microsoft’s numbers. In fact, based on its impressive reach, it’s one of the few companies in shouting distance of YouTube, and it’s also in range of several of the top mega-video ad networks.
So what exactly is Sharethrough? It’s a leading company in the emerging “social video” space, its founders say. Along with Unruly Media and Jun Group, Sharethrough is one of several firms claiming to manage vast distribution networks for video content and ads.
Some of these companies claim they’re able to push video to thousands of sites but can’t say exactly which sites they work with. Regardless, they promise to deliver brands thousands of video views. So how is that not a video ad network exactly?
“This is a platform for distribution,” said Sharethrough CEO Dan Greenberg. “This is for brands creating content for the Web. But there are no pre-roll ads. This is about a human being clicking on a video because they want to view it.”
The U.K. -based Unruly Media, which started operating in the U.S. in February, makes the same sort of claim. The company sells advertisers guaranteed views via a cost-per-view pricing model. According to Amanda Farrell, Unruly’s vp of sales, the company’s business model sort of crosses into the public relations realm, as it has relationships with partners like Buzzfeed and College Humor through which it negotiates editorial placements, not ad deals.
“We use a seeding model,” she said. “People will say to us, ‘you are an ad network, and we don’t work with ad networks.’ But we don’t run pre-roll ads. We guarantee views, and they are all user-initiated.”
But how can anybody guarantee views without pushing ads using autoplay video? Aren’t viral video ads about serendipity, not something that can be bought and paid for?
Well, Unruly, Sharethrough and others to varying degrees rely on incentive programs within social games to deliver a significant number of their views. Jun, for example, launched a partnership with CrowdStar Games earlier this summer.
CrowdStar publishes several top Facebook games, including It Girl, which boasts of over 6.7 million players. And within several of those titles, users will have the option to view video ads in exchange for free virtual goods or even Facebook Credits, courtesy of Jun Group.
That’s how many of these companies can guarantee traffic and build up huge reach numbers. While Unruly and Jun are not currently measured by comScore, Sharethrough’s new 97 million reach figure is based on potential reach — with all of its partners’ total audiences encompassed by that number.
According to Greenberg, that measurement “is the first step toward the macro ad market taking notice of the category. This is a real market.”
One that is attracting real brands. Sharethrough says it focuses on advertisers that produce original Web video ads, particularly artistic, long-form clips.
So far, it has worked with brands like Sony, Microsoft, General Motors, Nestle and Lego, which produced a three-minute stop-motion short film that’s garnered close to 1.4 million views on YouTube. Executives say that its average campaign size has grown 50 percent each quarter.
Unruly says it has generated interest from several Hollywood studios looking to distribute movie trailers. But the company’s U.S. business is still nascent.
Jun Group has been around the longest. It has landed business from top consumer packages goods companies like Conagra and Kraft — brands not known for taking bets on risky or mysterious digital offerings. Jun’s CEO Mitchell Reichgut says that while brands may not immediately get the social video model — suspecting it’s another spin on an ad network — the guaranteed view pricing model and, more important, the company’s results win them over.
According to Reichgut, for the average Jun campaign, 5 to 10 percent of viewers of an advertiser’s video spot go on to interact with that brand (by, for example, visiting its site) afterwards. Sometimes that number is as high as 25 percent.
“This is a pretty leading-edge market, and it does require some education,” Reichgut said. “But it’s definitely worth more than pre-roll.”
But right now, it seems that it’s being measured like a pre-roll video ad network. The flaw with that, said Reichgut, is that advertisers rarely want to reach every possible viewer a company like Jun can deliver, which could number in the hundreds of millions.
Unruly’s Farrell agrees: “Every deal we put together is custom to that advertiser.”
Maybe so, but for now, Sharethrough will enjoy seeing its name listed among the biggest video companies online, even if it’s based on reach potential.
“This helps get us past the experimental budgets,” said Greenberg. “This is a whole new category.”
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