• by Mark Walsh  @markfwal, April 15, 2009

Video ad network VideoEgg is introducing a new ad unit aimed at blogging sites that appear as a persistent strip across the top or bottom of the screen as readers scroll down the page.

The new "Twig" is an extension of VideoEgg's AdFrames platform offering rich media display units of varying sizes that expand to screen-size when rolled over to show a video. Advertisers pay on a cost-per-engagement (CPE) basis, or only when users interact with ads by watching a video, playing a game or taking some other desired action.

The Twig ads are meant to address the challenge advertisers face getting people to notice placements on blogs as they scroll down to read a series of posts rather than lingering on a typical article or other type of content page.

"Bloggers' ad inventory isn't worth anything because people are always scrolling down the page," said Troy Young, the company's chief marketing officer. "Having an ad up longer on the page allows us to deliver more value to advertisers because the performance improves. And when performance improves, bloggers will make more money."

To that end, the narrow Twig panel running across the top or bottom of the screen like a toolbar remains fixed as users scroll up or down the page. Like other AdFrame units, it carries VideoEgg's logo in the right corner (a white plus sign on a yellow field) and expands to a full-page takeover with video or other rich media. The ads can also be closed at any time.

The Twig ads will roll out as part of the AdFrames platform and run on sites with long pages, such Twitter photo-sharing site Twitpic, as well as on blogs in its network. The new unit is also a harbinger of more blog-related initiatives to come from VideoEgg. "For us, blogs are becoming more of a focus," said Young.

VideoEgg's audience across more than 200 sites grew to 100 million unique viewers in December from 85 million the prior month. Revenue grew 171% in 2008 and sales in the first quarter of 2009 were double the year-earlier period.

"We're seeing the best pick-up not in entertainment, as you might expect, but packaged goods is an insanely strong category for us," said Young, pointing to advertisers including Kraft, Procter & Gamble and Unilever. Four-year-old VideoEgg has worked with more than 300 brands that also include McDonald's, Nike and HP on 1,000-plus campaigns to date.

The San Francisco-based company's revenue gains run counter to the general decline in display ad spending, which fell more than 4% in the fourth quarter compared to a year ago, according to the most recent IAB/PricewaterhouseCoopers ad report.

Video ad spending was the lone bright spot in the display category, increasing 74% in the fourth quarter and tripling overall last year to $734 million. Rich media ad revenue in the fourth quarter, by contrast, dropped 19%, while spending on much-maligned banner ads actually grew 8%.

According to a recent blog post by comScore Chairman Gian Fulgoni, that pattern suggests marketers may be shifting dollars from rich media and sponsorship formats to cheaper banners, while also spending more on video despite the economic downturn.