• by Catharine P. Taylor , July 9, 2008

As anyone who has been reading my column knows, I've been traveling hill and dale (or more likely Facebook and FriendFeed) in search of workable ad models for social media. I'm certainly not alone -- if you want to read the latest example of how this is much harder than it looks, read today's story in The Wall Street Journal (subscription required) about Google's fits and starts at making YouTube as much of an advertising hit as it is a consumer one.

Therefore, I'm intrigued when any company tries to solve this most essential of social media problems, and WPP Group-backed VideoEgg, particularly with its announcement today that it is rolling out a few new features aimed at making its advertising more engaging, bears a closer look. (The company distributes ads to social networks and other of what it calls "social environments," such as gaming sites.)

Before I describe the features, let's note that at VideoEgg, the "e"-word isn't just another bit of useless buzz. As of a couple of months ago, the company committed to cost-per-engagement compensation from advertisers and says it has signed up more than 50 major brands, including Mazda, Microsoft and GM. Skeptics will counter that it's easy for advertisers to sign up for something they don't necessarily have to pay for, but according to Troy Young, chief marketing officer at VideoEgg (and full disclosure: a long-ago colleague of mine at Organic), the company "is seeing many campaigns north of $100,000."

By pegging its fortunes to engagement, it's harder for VideoEgg to cop out on the issue of whether the ads are working as opposed to merely being put in front of people. Thus, its new capabilities, which are rolling out into its proprietary AdFrames units, hone more closely than many to the need for the ads to matter. They include live, real-time RSS feeds, so that advertisers can post time-sensitive information; local ads that can deliver zip-code-specific messaging such as where a local car dealer is; rich ad units that can run multiple videos; shopping modules, and the ability to share and embed ads. While it's not as if no ad provider has thought of these kinds of executions before, each are obviously designed to be much harder-working than the typical banner ad and also, to be easier for advertisers to use. Said Young about the overall concept, "I think the new 30-second spot is a little micro-experience."

What's interesting to me about that statement is that Young isn't talking about what engaging non-search online advertising is considered to be these days. In a speech he gave at a conference given by a MediaPost competitor last year, TBWA/Chiat/Day creative guru Lee Clow talked about how, in the creative world, "Everything we do now is media," and then, from this description, proceeded mostly to trot out a lot of nifty snippets of film, some of which became viral. Entertainment, basically. Great. My guess is that a lot of YouTube advertisers are looking to go viral, even though trying to create a viral sensation is a completely scattershot approach at collecting engaged eyeballs.

But that's not what Young and VideoEgg are getting at. Instead, they're striving for relevant experience, which will, they hope, be relevant in a way not unlike the experience of going on your favorite social network and seeing all your friends there. When you're getting paid per engagement, it becomes obvious there's a lot more to making an ad an experience than needle-in-a-haystack attempts to make something viral.

As to how such ads perform in social media environments, I certainly don't have the stats in front of me. But all in all, what VideoEgg is endeavoring is a reasonable approach.

(P.S.: In last week's column, I neglected to post my Twitter name, which is cpealet -- if you want to follow me. Be forewarned that most of my observations are banal, and that, though I will be filing the column the next two weeks, mostly I'll be on vacation. On the other hand, who doesn't enjoy thinking of themselves as the leader of a cult with legions of followers? Sign up today!)