FreeWheel Offers Ad Control, Now with YouTube

Next New Networks recently tripled its video impressions for some shows, says Doug Knopper, co-founder and co-CEO of FreeWheel . It did it with no extra cost and almost no extra effort. All it did was start distributing to YouTube, with the help of FreeWheel.

FreeWheel, an advertising support company for the online video industry, recently announced a trial partnership with YouTube, and Next New Networks was the first beneficiary, the trial balloon. YouTube and FreeWheel had been in dialogue for a long time, says Knopper, and finally reached an agreement.

Under the deal, YouTube gains commercial and other professionally produced content from FreeWheel's partners, while the content owners get to control their own advertisements using FreeWheel's services. It's a win-win-win deal, since all three parties benefit from the traffic and ad revenue. Next New Networks is currently distributing a limited number of shows to YouTube, but will eventually offer thousands of episodes.

Breaking The YouTube Blockade
This trial seeks to end the reluctance that major content owners have over appearing on YouTube. Major companies need precise control over the ads that appear over their videos, Knopper says, so that sponsor messages don't conflict. They also need to be able to substitute ads or load new ads with short notice. FreeWheel gives them that ability.

"Those companies that have content that attract advertising dollars want control of those ads dollars," agrees David Hallerman, a senior analyst with eMarketer. "While the huge amount of traffic at YouTube certainly has been attractive, many content providers have been reluctant to make deals with YouTube because of that loss of control and advertising revenue.

"A new system that gives the content provider the ability to still get advertising revenue and also have the potential for a much larger audience could be a major change for the growth of the whole online video market," says Hallerman. He doubts that YouTube is making much money from each ad, but since it's getting traffic it will make up the amount in volume.

"A Whole New Ballgame"
FreeWheel began two years ago, the product of three Double-Click veterans, and the service launched a year-and-a-half ago. Already it counts CBS, WB, Marvel, Blip, Veoh, and Sling as clients. Even more well-known names are waiting in the wings, says Knopper, not yet announced. In fact, he says the company currently has more unannounced than announced partners. Look for big names to come on board in September.

"It's a whole new ballgame now," Knopper says. Big media companies haven't been distributing much video online because so far management systems haven't been in place. Others are inserting ads manually, which is labor-intensive. Knopper recently saw an email from one media company saying that if its online video became popular, it wouldn't be able to do more advertising campaigns because the complexity would overwhelm it.

FreeWheel was designed to be the solution, a monetization rights management service that allows content owners to put rules and restrictions in place, ensuring that "the right ads get run in the right place," says Knoper, and that everyone gets paid.

A New Way of Working
Getting set up with FreeWheel is a one-time integration, and afterwards content owners can work with any of FreeWheel's partners.

FreeWheel delivers advertising metrics on ad impressions and inventory management. It doesn't offer viewership metrics, such has how long viewers watched and when they tuned out. The company works with all ad types, including pre-roll, mid-roll, and post-roll, banners, and overlays.

The kind of one-stop control that FreeWheel offers makes distribution simpler for a company like Next New Networks, says Knopper. A typical Next New Networks show airs two to three episodes per week, he says, and each goes to five to ten video portals. Each of those episodes have multiple advertisers. FreeWheel lets the provider make changes from one place and see results almost in real time.

"I think there's a huge demand for this," says Knopper. "It shows that the market is maturing because people are doing it with a science and trying a bring a system to things. I think this industry is starting to take off and the partnerships that we've announced are something that everyone benefits from."