Flipboard Presses Play on Full-Page Video Ads

Gucci, Sony Pictures and Woodford Reserve Among First Brands to Test Ads

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Flipboard's first video advertisers include Gucci and Sony Pictures' 'Fury'
Flipboard's first video advertisers include Gucci and Sony Pictures' 'Fury'

Flipboard's brand advertising playbook has culled not only from print magazines but now TV as well.

The news-reading service will start testing full-screen videos ads in its magazine-like mobile apps on Monday. Woodford Reserve, Gucci, Chrysler, Conrad Hotels & Resorts, Sony Pictures' film "Fury," Principal Financial Group and Jack Daniel's are among the 10 brands first testing the video ads.

The video spots will appear in the full-page ad slots that appear as people swipe through content in Flipboard's digital magazines.

"This is furthering our belief that there's really an opportunity to do high-quality premium brand advertising in mobile," said Flipboard CEO Mike McCue. "Video obviously is a really important way to do that."

People will need to click the ads in order to play them, though Mr. McCue said the company is considering making the videos play automatically.

Flipboard users may be startled to encounter videos while swiping through Flipboard's text-and-photo heavy digital magazines, where the elegant layout of still images is a hallmark. But there is already a tremendous amount of video on Flipboard, Mr. McCue said.

The company will be monitoring how people respond to the videos ads, particularly as it considers whether to adopt an autoplay strategy -- a la Facebook's in-feed video advertising. And it's hard to overlook advertisers' interest in the format.

U.S. advertisers are projected to increase their spending on digital video ads by 42% to $5.96 billion this year, according to eMarketer estimates.

"I think people are fairly open to the idea that video happens," said Woodford Reserve brand director Jason Kempf, who noted that 2014 marked the brand's first push into video advertising. The alcoholic beverage brand will start with 15-second spots and look at making any necessary adjustments about a month into the 10- to 12-week campaign. Woodford Reserve's media agency, UM, handled the buy.

While Woodford Reserve's ads will be the same creative that has aired on TV and elsewhere online, Mr. Kempf said Flipboard offers a unique twist with the ability to add a couple buttons to the spot's end that link to the brand's Flipboard magazine and mobile tasting app.

"What we like about Flipboard so much is we can not just drive people to our brand site or brand social network page," Mr. Kempf said. Instead it lets Woodford Reserve drive people to its own Flipboard magazine, keeping them in the app they were already using.

Flipboard is selling the video ads as an add-on to its existing full-page ads, making them available only to marketers that meet a spending minimum. But it isn't charging a premium: Advertisers will pay for the spots on a per-impression basis, the way they do for ad pages, at the same rate.

The video ads will run across all content types on Flipboard, including publications from major publishers like Vanity Fair and The New York Times as well as the 10-million-plus magazines curated by individual Flipboard users.

Flipboard shares with publishers a cut of the revenue from ads that run against their content in the app, but does not yet split revenue with users who curate magazines. Mr. McCue declined to specify the split but said it can vary depending on who sold the ad. Some publishers handle their own ad sales, some rely on Flipboard's sales team and others sell the ads jointly with Flipboard.

Flipboard's roughly 20-person sales team will initially sell the video ads, but "our game plan is to enable the publishers to sell these ads as well," Mr. McCue said.

Flipboard sells its ads across 15 to 20 content categories, including travel, business and design. Mr. McCue said the company plans to add to those categories "quite a bit in the coming months" as it incorporates data on reader interests from Zite, the news-reading app that Flipboard bought from CNN earlier this year.

The video ads will not be running in Zite. That app doesn't feature any advertising and soon enough won't feature anything at all. "Our plan ultimately is to shut down Zite. Not right away, but as we build its capabilities into Flipboard, we need Zite less and less," Mr. McCue said.

Flipboard has roughly 100 million total registered users, but Mr. McCue declined to say how many of those people use Flipboard each month. He also declined to say how much revenue Flipboard has made and whether the company is profitable.

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