ATKearney is performing an active watch on emerging new business models in the digital economy. We publish a periodical newsletter for executives highlighting key changes on the move in the media, telecom and consumer industry. It is each time illustrated through a start up example.

1. IMAGINE THE FUTURE
Leveraging innovative business models
“In-content” advertising
- Newsletter # 5, 2009 -
Context
“In-content” advertising is emerging as a powerful new alternative for ad
placement. Rather than before, following, or during a commercial break –
ads are placed “within” a video or game. The two competing models are
classic ad viewing that is on-top of the content, and advanced click-on ads
where Internet features enable viewers to interact with the ad real-time
when they are most motivated.
Innovative business models
Traditional ad adaptation to “In-content” advertising
C o n te n t F re e fo r us e rs
The cheap mortgage loan
A d ve rtis in g The cheap mortgage loan
Advanced “In-content” advertising (example of VideoClix.tv)
C O N TE N T P R O D U C E R S A D V E R TIS E R S Key Highlights
• Advertisers
are increasingly
V ideo conte nt w ith ad C onte nt related challenged in planning and
reve nu e prosp ect targeting ad
tracking communication and
1 VideoClixTV collects authorized 2 VideoClixTV transforms content media spend because of
high quality content into interactive ad clickable video
fragmenting and de-linearized
broadcasting platforms
• Initially
concerned with
content piracy, major content
producers are massively
investing in mobile and
4 Targeted display ads are 3 Videos are available in high-quality Internet platforms with a
delivered on viewers' click free through the VideoClix Player
predominance of VOD model
which guarantees monetization.
However, legal Internet viewing
model might only reach critical
size through free broadcasting
U sers can click on any U sers can
object w ithin vide os w atch vid eos • Pure players such as VideoClix
to find out m ore W E B V IEW E R S on the w eb
intend to combine the strategic
interests of both advertisers
Business opportunities and content producers by
developing in-content
• Content producers – gain an additional revenue source with this advertising formats for online
massive, high quality broadcasting platform (beyond TV and cinema), videos or video games
which also discourages piracy because it’s free to users
• Advertisers • These initiatives are driving
- Solution to reach viewers who are escaping from TV commercials the emergence of “branded
- Channel to target viewers, one-on-one, according to their interests content”, the controversial
- Unlimited and tailor-made ad space, even in blockbusters, for more advertising trend of creating
options, less competition, and reduced placement costs content for a specific brand
- Ability to track ROI in advertising and improve spend
• Content aggregators – compelling business opportunity for
first-movers with the technology and the connections to bring together
producers and advertisers – with broad user appeal

2. VideoClix.tv profile Website
• Commercial launched in 2006 (VideoClix technology
developed in 1999)
• Employees: 44 in Europe, Asia, North America and
Central America
• Founder: Babak Maghfourian
• Source of revenue: advertising revenue sharing with content
producers (CPC, CPL, CPA), selling annual licenses,
commission on products sold
• Community members: over 11,000 licensees around
the globe
A.T. Kearney interview of VideoClix.tv founder – Babak Maghfourian
• What problem does VideoClix solve?
“VideoClix allows advertisers to get their message across in a non-intrusive manner. It is user initiated and
more effective than traditional advertisement. Traditional CTR (click through ratio) is less than 2%, but
VideoClix CTR is higher than 4%.”
• What is VideoClix’s Value proposition?
“Multiple value: new revenue channel for content owners, non-intrusive yet very effective advertisement,
additional info on all objects in video, increased sales and conversions for ecommerce stores, higher retention
and increased traffic for video portals.”
• What is new /unique?
“VideoClix turns what is inherently a passive experience into an active and engaging experience. A layer of
information and monetization that has never existed before.”
• How large is the business behind it?
“The clickability is the tip of the iceberg. It was achieved in 1999 and perfected in early 2001 and 02.The real
business is the relationships, the content partners, the traffic and ad sales that truly fuel this engine.”
Example of other “In-content” advertising initiatives
ITV In-Video Advertising YouTube
• Trial version launched in October 2008 • Launched in August 2007
• An automatically placed overlay advertising process • InVideo advertising by Google allows advertisers
to superimpose company logos into clear spaces to run “20-10-80” overlay ads on selected YouTube
(such as blue skies) during online video programs videos (a 80% transparent teaser overlay appears
in the bottom 20% of the screen for 10 seconds)
Massive In-Game Advertising Google
• Launched in 2002 • Launched in 2008
• The Microsoft-owned company has developed a • AdSense for Games, which is currently in beta,
straightforward and seamless process for executing will allow video, image or text ads to be displayed
in-game ad campaigns at any point in online games (particularly in casual
games)
About A.T. Kearney
A.T. Kearney is a global strategic management consulting firm known for helping clients gain leading results through a
unique combination of strategic insight and collaborative working style. We serve the largest global clients in all major
industries from our offices located in 35 countries. We have developed a leading Communications and Media practice
with more than 600 dedicated professionals worldwide, focusing on addressing strategic and operational issues of the
Telecom, Media and High Technology industry.
For further information about the A.T. Kearney CHT practice please visit: www.atkearney.com
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This newsletter represents our best independent judgment based on information made available to us at the relevant time. No responsibility or liability will be accepted as to the accuracy or completeness of featured statements.