He believes the hidden tool at Veoh, whose famous investor is Michael Eisner, is its recommendation engine, which advertisers can adopt to serve relevant ads.
Ad Age: This seems like a very different role than the one you held at Yahoo. How will what you did there help you at Veoh?
Steve Mitgang: It's a CEO role in a different space, but it completely leverages my background. We have a phenomenal user experience, completely differentiated in the marketplace right now. We have the videos you want to watch -- long or short form, user generated or premium content or time shifted because you can save it like a TiVo. Veoh's created an incredible user experience. At the same time, we have a great user experience, but we don't have a great business yet. We have to figure out how advertisers can engage in a meaningful way with users watching video in all different forms.
Ad Age: Why has it been so hard to create a viable business around online video? It seems to be wildly popular among consumers.
Mr. Mitgang: According to the reports, YouTube only sold $30 million in ads last year because they didn't build a system to support ... that healthy tension between editorial and advertising. They just didn't build it. They were trying to grow [an advertising vehicle] out of a legacy position as opposed to starting out the right way. We've built and are enhancing a discovery and recommendation engine to give users the right video and discover gems. Not just show you what you're looking for. The flip side of understanding those user behaviors and recommendations is for targeting purchases. We can say, look at the car enthusiasts ... [these ones] are primarily interested in German cars or muscle cars. Being able to tell that to the brand manager of Mustang or Mini, we'll be able to help them better than anyone else. Whether watching user-generated or premium content we'll help target against the right users.
Ad Age: From a consumer standpoint, how does the recommendation engine help?
Mr. Mitgang: There are big problems on horizon for video that we're solving. In a world with billions of videos, it's harder for people to know what's interesting. That's why building discovery or recommendation engines is key. Search only solves a transactional problem. Whether you're shopping at Amazon or Netflix that discovery process is an important one. When people are using video more completely, in a 100,000 channel world, discovery's important. How you manage videos is important, along with how you manage your bandwidth and disk space.
Ad Age: What marketers are using video smartly?
Mr. Mitgang: I can think of a general list of folks who are experimenting -- American Express, Nissan, even P&G, are all doing some interesting experimentation. I'm intrigued by what some of the candy companies are doing and their interest in video. Then you have the edge brands, folks like Puma -- it'll be interesting to take their brands to video.