Advertiser demand for original, professionally produced online video content is exceeding supply right now, according to Joe Hurd, vice president of business development at VideoEgg, who made his comments at the
Merriman Curhan Ford & Co. IP Video Conference online video panel in San Francisco earlier this week. Hurd added that this trend only applies to professional video content, not that of the user generated variety.
The imbalance is driving up prices as video ad
inventory for original content is selling out at CPMs of $20 or higher. That's good news for VideoEgg, which is a video ad network that sells video ad inventory on its own website as well as hundreds of other websites with video
content. The company has received venture capital from First Round Capital, August Capital, Maveron, WPP and Focus Ventures.
Another panelist, Barak Bar-Cohen, COO of Narrowstep (
NRWS), mentioned that on some of the niche
content sites, advertising CPMs are even north of $100. Not too shabby. The question is how many sites are drawing the audience size that can turn that CPM rate into significant revenue right now. What will likely happen is that rate will decline as online video viewership increases.
Nevertheless, the promising outlook certainly validates VideoEgg's strategic decisions since 2005 to morph from an
online video editing startup to an online video hosting startup to its
current iteration as an online video advertising network startup.
- Joshua Jaffe
Joshua Jaffe is general manager of Tech Confidential.com.
