Making Online Ads for Video Content More Engaging

Ultramercial's Paul Grusche Says His Model Will Pay for Everything

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NEW YORK (Adage.com) -- As more and more media outlets test payment options for their on-demand and online content, Ultramercial says it offers a solution that satisfies both marketers and viewers: interact with a commercial and watch the premium content for free. Ultramercial will shop its product around at the Ad:tech conference, which runs April 26-28, and will offer delegates free Wi-Fi if they watch an ad. Ultramercial's Paul Grusche, senior VP-sales and marketing, explains to Mediaworks how the service works.
Paul Grusche
Paul Grusche

MediaWorks: Why should advertisers know about your company?

Paul Grusche: The model is a unique one. We offer the chance for advertisers to get guaranteed engagement through an explicit relationship that is upfront and honest between advertisers and the [online] publisher and viewer. What we do is we offer the chance for a viewer to choose to watch and ad as an alternative form of payment to access premium content. We continue to sign up publishers. They're the ones really feeling the pain. They're losing ad dollars and circulation. They stand to win the most. We're growing up legions of kids who think that everything should be for free.

MediaWorks: Who are your clients?

Mr. Grusche: We count Time magazine as client, The Economist, Salon.com. We are partners with the Walt Disney Group and ABC and Real Networks. We do very well with the entertainment guys.

MediaWorks: What is an ultramercial?

Mr. Grusche: With video coming online, everyone is trying to mimic the broadcast model. They [videos] play automatically just like TV. They don't require interaction; they're an excuse to read your e-mail till the content starts. Even with video online you still don't know if people are paying attention. [With our service] We know you started the ad and there are prompts that click you through, and we can track your engagement. The average time spent is 50 seconds across all advertisers. There is incentive to watch the ad and there's goodwill behind the ad; what this ad does is it pays for everything.

MediaWorks: Give us a case study?

Mr. Grusche: ABC News Now is a video news program online. You can get a 60-minute trial after completing an AT&T ad. We are also fairly close to some other companies that would bring this [model] to the cable video-on-demand business. EDS also offers access to The Economist.com; in return users get a free day pass.

MediaWorks: What's it going to cost a marketer and how is it priced?

Mr. Grusche: A lot is CPM [cost-per-thousand viewers] based; we'll see $30 to $100 CPMs. There is also sponsorship for a time period -- two weeks is very effective. This is by far the highest valued unit for our publishing clients.

MediaWorks: What have you learned about what ads work online?

Mr. Grusche: We never recommend more than a 60-second ad but we're seeing them shorter. But it's difficult for an advertiser to communicate their message in 15 seconds. Imagine what the creative agencies would do if they could have guaranteed attention 100%. They could spend time marketing the product. The media agencies are the ones that are buying it and they often say, "I have this off the shelf, can we run that?" but it doesn't take advantage.

MediaWorks: What's the history of Ultramercial?

Mr. Grusche: It's privately held. We went live in November 2002 and since we launched we noticed this is a business model and not just a rich-media ad unit. Publishers are struggling to protect the value of their content, they're eroding their print and subscribers base by giving away content online for free. They can't offer the big multipage fold-out ads online. They keep trying to reinvent themselves to attract attention. Our model throws all that out of the window.
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