David Parker is the co-founder of a new startup in the online video ad space called Tadcast who's goal to shake up the online video industry by helping filmmakers finally earn some real cash for doing what they love, by bringing product placement to online video. As a former filmmaker David knows firsthand how difficult it is to make money in the industry. In New York he made a couple of movies including a documentary, "One Per Cent ," that won the Audience Award at the 2006 Vail Film Festival which more votes than other movies, including those with heavy hitters like Jon Stewart, Hugh Grant, and Janeane Garofalo and with budgets hundreds of times the size of his movie. But despite that success, David still had difficulty monetizing his film. So he went to Harvard Business School with the intent to build a company that would allow filmmakers a real way to earn significant money for their work. He and his classmate have been working full-time on top of their academic course-load to realize this vision.
A few weeks ago, they launched the Tadcast Contest to prove that online video product placement is safe and effective. Filmmakers can win $5,000 by incorporating one of three products into their next video productions (more details at www.tadcast.com) - one of those products is Honest Tea (a Coca-Cola minority owned brand). The contest is also sponsored by Adobe and IMDb. Their next goal is to create a market that allows filmmakers to easily find products that they can incorporate into their productions on a pay-per-view basis and they are currently finalizing deals with a bunch of consumer products brands to participate in this model.
David strongly believes that product placement will be the solution and that online video is great place to advertise because it would allow advertisers a way to more organically reach viewers, it would allow filmmakers a more substantial way to earn money, and it would allow viewers to watch videos without annoying overlays and pre-rolls.
I had an opportunity to speak with David recently about Tadcast and asked him how he came up with product placement. He said, "It was a couple of years ago when I was thinking about how Tivo was going to change television and that they were going to need to make up their revenue somewhere else, within the content, that viewers wouldn't be able to skip over."
Larry Kless: What is your goal with the contest and your ultimate goal for Tadcast?
David Parker: The contest is different form our ultimate vision that I just described. We are working with Honest Tea, Zildjian (the oldest family-owned US business), and sweetriot (an organic confectionery start-up) on a contest in order to demonstrate that product placement in UGC is safe and effective. The producers will place the products in as many videos that he or she chooses, according to the requirements stipulated by each advertiser, and the producer with the most total views wins the contest. IMDb and Adobe are offering contest winners prizes, and the producer with the most total views from videos he or she submits will win $5,000. The top 10 video winners will receive a 3-month subscription to IMDb and Adobe will be giving the second place winner an editing suite that retails for $1,700.
LK: Can you describe the launch and timeline of the contest?
DP: I think of what we're doing in distinct components. We launched the contest to filmmakers in December but they haven't been allowed to upload videos yet. They're allowed to start uploading videos February 22nd. The views that will count will be from Feb. 22 to May 25. In parallel to that we're speaking to advertisers and all different types of filmmakers ranging from Hollywood filmmakers to student filmmakers and with every strata we're trying to get them matched up to get the most appropriate deals done. Advertisers will pay on a pay-per-video-view basis. That's the ultimate vision and that's what we're beginning to work out deals for.
LK: So if your goal is to help filmmakers monetize their content, is the method CPM based? What type of ad share?
DP: Yes, it's going to be CPM based, but the CPM range will vary. Some will be between $10-50 depending on the advertiser, filmmaker, and level of product integration. We want this to work on a reputational system. The filmmakers who have performed the best and have built up a good reputation on our site, they've always fulfilled the advertisers requirements, they get great video views per video, they'll be able to not only command higher CPMs from advertisers and get better access to products, but they'll also get a higher percentage of the split. So it's going to heavily vary based on the filmmaker's reputation.
LK: What are your short terms and long term goals?
DP: Our goal basically is to really grow the market for product placement in online video and to show that it's a great place to advertise. To reach niche communities and reach people safely and effectively. Our ultimate vision for Tadcast is an automated marketplace between advertisers and producers for product placement in online video. If we can prove that online video can have a significant revenue stream, content producers will expect real money for their work and they'll in turn put in more production value. Soon our online video options will be better than cats on skateboards.
LK: How did you broker the current deals with advertisers Honest Tea, Zildjian, and sweetriot and contest sponsors IMDB and Adobe?
DP: My partner and I brainstormed for a while on what type of companies would be suited for this competition. What we wanted was one very big brand, so Honest Tea and Zildjian are those big brands and we wanted at least one startup which is sweetriot, another company started by a Harvard Business School Alum. We also wanted the products that we used to be able to be purchased nationally because we didn't know where these videos would be coming from. So if someone in Texas saw the product placement and wanted to get sweetriot we wanted them to be able to get it. So we put together a list of cool companies that we thought we'd like to to work with and got responses from these three. They are advertisers and the contest sponsors are IMBD and Adobe. For the sponsors we thought about who would be a good fit for this and since the people coming to our web site would be predominantly filmmakers, and having been a filmmaker myself I used IMDB Pro which is a really great service and they were the first sponsor we spoke to. They got on board. Adobe also supports student filmmakers so they're sponsoring the contest by donating their product too, a really great editing suite.
LK: What's your vision of maintaining brand integrity of the products being advertised rather than just wearing the T-shirt? Does it delve in that deep?
DP: One of the things we wanted to do with this contest was to show that product placement was safe for advertisers. Because it's user generated the advertisers don't know the filmmakers incorporating the products, so we wanted to show that there was some level of trust. Ultimately we're going to be very focused on maintaining quality controls and making sure that all of the requirements by the advertisers have been met by the filmmakers before anyone gets paid for any transaction. It's yet to be seen but I'm pretty confident that filmmakers will treat the brands nicely and live up to the advertisers demands in placing each product properly. Honest Tea, for instance, requires that its "bottle should appear cold or refreshing" in videos, while SweetRiot instructs that its chocolate-covered cacao nibs "be consumed in small portions (not all in one gulp)."
LK: How do you differentiate yourself from other companies like Storybids? What's your value proposition?
DP: We're completely different from Storybids, the way our process works is that advertisers will go up to the site, and for instance Honest Tea would say, "I want these requirements, no nudity, no profanity, the character has to drink the product in fixed gulps or whatever it is, we'll pay a CPM of "X" and then video makers go out and choose which products they can incorporate into their videos. Storybids has advertisers bidding for scripts or videos, I think. If you have advertisers bidding on stories there's going to be huge lead times, because you have to wait until the auction ends. It's a reverse process and our way is a more automated way of doing things. So the advertiser basically says that they have a budget of $200,000 and then we'll deplete that budget everytime a filmmaker's video, that meets the advertisers' requirements generates views. With Tadcast, once the advertiser sets the budget and lists the requirements, they can relax and know that we will take care of the rest.
LK: Where are you now in the process?
If Tadcast proves successful David and his associates will be building a bridge to their new business. With the countdown clock on the web site ticking away "Until the Revolutions Begins" for the opening of the contest on Feb. 22 he noted that the market in its early days and he is sure that it's going to be proven that online video is going to be an excellent place for advertisers and that in the next couple of years it's really going to catch on.
According to KillerStartups, Tadcast voted one of the three most awesome startups for the entire month of January and it might be a killer because, "The site will stand as a spot where advertisers and filmmakers can connect effectively, and come up with something that will benefit all concerned parties (including the public)."
Contest details are here: Tadcast » Contest Details | Online Video Product Placement
About Tadcast:
Today, there is no good way for filmmakers to earn real money making online videos. We plan to change that. And we think product placement will play a big role in getting us there. Product placement ads don’t take over your screen, they don’t annoyingly pop up, they don’t flash like a maniac on the side of your browser, and they don’t make you wait 30 seconds to watch a 2 minute video that you’re not even sure you want to watch. Hollywood is already catching on to this, and we plan to bring this high revenue potential to you. Ultimately, Tadcast will be a site where advertisers post products that they want to advertise through product placement. They will say what kind of product it is, all the requirements they have for the videos, and a price they are willing to pay for every video view. The filmmaker will then visit Tadcast, browse the list of campaigns posted by our advertisers, choose a product that can be organically incorporated into the video with highest pay per view, and then submit the video to Tadcast. But we need a bridge to get there. Before advertisers start shelling out the big bucks, we need to show them that online videomakers will comply with their requirements and help build their brands. We also need to show them that this kind of brand advertising works. This is why we are launching the Tadcast Contest. By participating in this contest, you are not only taking a shot at cash and prizes, but you are also helping to make this revolution a reality.
CONTACT Tadcast
Phone: (213) 514-5562
Email: info@tadcast.com
