Swedish video advertisement overlay service VideoPlaza has received €420,000 seed investment from Nordic VC Creandum and angels Henrik Torstensson and Magnus Hultman. VideoPlaza has been doing well – partnering up with Sweden’s number-three pay-TV station Kanal 5’s website and two other clients – and operates in a booming market.
CEO Sorosh Tavakoli
The Swedes watch 115% more online videos over the last year, so VideoPlaza has enough content to monetize. The money will be used for international expansion.
Earlier this week, the Wall Street Journal got two anonymous sources talking about YouTube’s failing advertisement strategy. The video giant generates 10 billion video views a day, but ‘only’ manages to make $200 million a year from advertising. Thus the Google-owned company might introduce pre and post-roll ads, said the sources to WSJ.
This YouTube story symbolizes the need for video sites to monetize their content. VideoPlaza – that offers overlay ads for Flash and Silverlight videos – will be one of many video ad start-ups that receive a financial boost. It’s time for them to fix those crappy business models.
By the way, VideoPlaza has an effective and friendly team page – good inspiration for yours.
I know it’s not fashionable, but I’m fairly certain we’ll see the resurgance of pre-roll over and above these sort of services. People like to moan about pre-roll because it’s ‘intrusive’ but just means it’s actually being noticed.
Banner and buttons have their place but it’s not for brand building. Much of the potential for online advertising growth will be from brand focused TV advertisers.
There’s little doubt that pre-roll and other video advertising (i.e. the advertising itself is video) is more effective for raising brand awareness than a banner ever will be. The sort of advertising that VideoPlaza has might be great for direct response/CPA activity, but not for the sort of large scale campaigns that standardised pre-roll formats can deliver.