I try not to write about portfolio company news or announcements but some recent press about FreeWheel Media is worth trumpeting given the potential significance it has for the entire online video advertising ecosystem. YouTube has historically made it incredibly difficult for content owners to sell advertising against their content distributed through YouTube. Unlike traditional online advertising which is automatically delivered and optimized via third party ad servers, video content owners working with YouTube needed to hardcode the advertising or have YouTube’s ad operations team traffick the campaigns on their behalf. The integration of FreeWheel’s platform with YouTube changes these old rules of engagement for all of YouTube’s content partners. Now, using a single platform, those partners can easily and automatically scale their video monetization efforts across distribution partners, including YouTube. Some of the specific benefits of the YouTube and FreeWheel integration are:
– Greater ad format options, including pre-rolls and companion banners
– More ad targeting options, including contextual and behavioral
– Automated ad optimization across campaigns and third party ad networks
– Consistency of campaign and metrics across YouTube and other distribution points
The net result is that the online video advertising market can begin to operate more like the traditional display advertising market. Advertisers can expect consistency in delivery and metrics. Content owners can offer consistency in formats and targeting. And distribution partners can expect lower operating costs and greater sell-through. Everyone wins. And that is why all of the players in the online video ecosystem should be paying attention to this news and coming announcements from other FreeWheel partners and customers, like Blip.tv. The YouTube-FreeWheel announcement represents a major tipping point for the online video advertising market and the ability of companies to turn online video in a viable business.