Hey, Wanna Watch Some Ads? It’ll Be Fun, I Promise

LiveRail, the latest video ad marketplace to hit the scene, evolved out of a web design consultancy (note the nice corporate website). The London-based company doesn’t come with much in the way of headline names, funding, technology, or industry connections, but its mission is a twist on what’s out there: “to promote the ads that people will enjoy,” as LiveRail CEO Mark Trefgarne told us.

It’s part of a trend we’ve seen in online video advertising — offering people a conscious choice to watch ads, and rewarding them for it. Others in the space include BrandPort, AdPerk, and BrightSpot. Those sites are a bit more transactional, though, offering point system that help pay for online or offline goods. In the case of LiveRail, we’re just talking about the most basic of behavioral targeting — giving better exposure to ads that do better, and making them look like related content.

Earlier this year when I started looking at these startups I spoke with VC Nat Goldhaber, who had founded and led mid-nineties company Cybergold, an advertising-in-exchange-for-content platform that had a lot in common with them. “Frankly, I don’t think this idea is as relevant as when we tried it ten years ago,” he told me, saying advertising and subscription business models on the web have only gotten more effective. And of course people will game any such system, making up fake profiles and racking up views that are of no value to advertisers.

LiveRail, to its credit, has a much less radical departure for user behavior. People are just there to watch video, and perhaps they can be convinced to click on some ads. With companies like BrandPort, AdPerk, and BrightSpot, you’re not necessarily attracting advertisers’ ideal customers, but rather people who don’t value their time and would rather keep their wallets in their pockets.

But LiveRail’s model, on the other hand — to try to get publishers to upload videos to its platform and categorize them, and advertisers to submit their ads and categorize them, then match the two (see example embedded above) — is just totally wrong for the current market. Trefgarne said it’s just a stopgap till it can work out compatibility with other aggregator’s platforms and players. “We wanted to get a system out ASAP; there’s no point in being the last to the party,” he said. For now the company is giving away $1000 budgets to attract advertisers to its platform.

Treating advertising as content is big question mark — one we’re looking to tackle at our Pier Screenings event in a couple weeks. On the plus side, people have signed up to see the ads, so they’re a ready and willing audience. And if we’re going to have to sit through advertising to pay for our content, the more enjoyable (and, once behavioral tracking comes into it, relevant) it becomes, the better, right?