• by March 14, 2007

Spotzer appears to be the latest entrant into the customizable "ready-to-air" online video space. The European Amsterdam-based company targets small- and medium-sized marketers that are unable to allocate millions of dollars or Euros to cover production, not to mention media buying and planning costs.

Spotzer maintains a video library of generic commercial footage that can be customized for any client, across any global region, crafts highly targetable media plans, and buys video on the Web formats, cable and local TV, out-of-home media, and narrowcasting. It also plans to offer video for wireless, podcast, and MP3 campaigns in the future. The company shoots tons of video and literally rents it out to clients.

For example, now in what it describes as a soft launch mode, Spotzer says it has 100 cross-cultural ads that businesses can rent and customize to target locally to different regions using specific media formats. Its focus on global markets appears to be a point of differentiation between it and similar providers in the field like SpotRunner, Pick-N-Click Ads, and CheapTV Spots.

The idea of targeting ready-to-air ads to local audiences across regions is Spotzer's premise. Andy Klein, the company's founder, chairman, and CEO, is no stranger to the Internet space; the five-time entrepreneur founded Wit Capital, the Internet investment bank in 1996 which he sold to Charles Schwab in 2004. He also started SkyBridge Capital Fund, a hedge fund incubation fund that has ties to Michael Dell's private investment fund. For Spotzer, Klein teamed up with Thed Lenssen, one of Europe's most acclaimed commercial directors who has directed commercials for Heineken, Philips, Volkswagen, and others.

The idea for Spotzer hatched while Klein was learning about SpotRunner: "I was out at PC Forum a year ago and saw what SpotRunner was doing and it excited me about building an ad business," Klein said. "SpotRunner pre-produced video commercials and rents them to clients in different places. It's focused purely on cable TV and on U.S. advertising clients. I thought I could do it differently," he explained.

Klein saw an opportunity to create a global business based on a library of universal commercials that could be modified to work for local businesses across cultures and languages. He also saw an opportunity to extend the core idea of ready-to-air commercials to multiple platforms, including online video, narrowcasting and cell phones--where there is even greater potential for targeted, addressable advertising compared to cable television.

Spotzer makes its money in two ways--from rental fees paid by clients (marketers literally "rent" the commercial video for use across media platforms)--and from licensing fees from renting the video and the commissions earned from placing the media. For example, if a marketer spends $6,500 on media buying/planning, the video would cost $899. That same video could also be rented to a client in California, Paris, or Chicago.

Spotzer also offers personalized media formats in which marketers can upload a photo or video and voiceover. If they spend a minimum of $2,500 dollars, for example, they can rent the commercial for one year in one state for $519 for a kind of exclusivity by state.

The turnkey solution seems to work for a chain of Amsterdam-based fitness centers: "We don't compete with companies outside our region, so giving up exclusivity for an affordable video ad seemed sensible for us. But what really made us clients was the quality of the creative. No matter how much more we spent, I am not sure we would have produced a better ad through the traditional agency process," said Aniel Sriram, founder, F!tness 365 and a Spotzer client. He is doing another campaign with Spotzer in May on the Web and on local TV.

"We are really targeting small- and medium-sized businesses that need a creative solution that's not cost-prohibitive and offers highly targetable inventory and high-quality creative," Klein noted. Spotzer launched with a U.S. Web site; Dutch and U.K.-oriented sites are due soon.

The company is also in the film production business. "We just made 100 films in two weeks in the Ukraine," Klein notes. "We're re-engineering the production process to be more efficient. We reached out to agencies and directors to get 150 concepts in five different consumer categories. We're shooting 20- to 30-second commercials. Interestingly, the company isn't making ads at this point for particular clients, but pre-producing ads in advance of having clients. "We're making the quintessential ad for a health club or a furniture club," he said.

SpotRunner--which is backed by media heavyweights CBS, WPP, Interpublic and Rupert Murdoch's son Lachlan, as well as various venture funds--has launched a self-service for customizing video, as well as buying and planning media.