Joost's Advertising Model

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by: Ilya Vedrashko 

Have run into a couple of articles discussing the advertising side of Joost, an upcoming video delivery service from the makers of Skype and Kazaa. (From their site: "Joost uses secure peer-to-peer technology to stream programmes to your computer.

Unlike other TV and video-based web applications, it does not require users to download any files to their computers or browse through complicated websites.")

Wired: "But the project also aims to add value to free TV in a way that only the Internet can: less commercial time. Like, 90 percent less — as little as one minute per hour of viewing, if projections pan out. "The key in the past was volume and frequency," says Clark. "Now it's going to be quality."

One of the Leiden crew's top priorities is a backend ad engine that can pinpoint viewers by location, time of day, viewing habits, and opt-in profile information to serve up a perfect ad. Developed by open source geeks in privacy-centric Europe, the central database doesn't store any identifying data. Personal information is stored only on the user's own PC. Clark, the ad sales chief, is happy to blue-sky the possibilities: "Buy all the Desperate Housewives viewers in a zip code. Or the first thing a given viewer watches on a given day."

In theory, that kind of control will make the network much more valuable to advertisers. "We offer targeting they've never dreamed about in the TV world," says Werdelin. "And a deeper relationship with customers. Not just deeper than TV, but deeper than most of what you get on the Net. I don't think anyone really knows what those things are worth."

"So far, Joost's ad model includes five- to seven-second ads that pop up when certain videos are initiated and mid-roll video ads in videos more than five minutes long, the number of which are scaled pro rata to the length of the content. Wrigley, T-Mobile, Maybelline and Phillips are among the beta advertisers. The idea is to have a single advertiser sponsor a piece of content, but to give it multiple elements, Mr. Clark said.

Like other web ads, they're interactive and let users click through for more info, e-mail offers and long-form messages. The service also touts what will be powerful targeting and reporting capabilities. Echoing Joost's founders, Mr. Clark said, "We're combining the best of the web with the best of TV."

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