The 1-2-3s of Video Syndication - And How to Make Money Doing It

March 31, 2011 Jayant Kadambi

Video syndication is a hot topic in the world of online media. While the general idea is well enough understood—it’s a way for content owners to make more money in more places—there is still plenty of confusion about what video syndication actually is, how it works, and what publishers need to do to start the revenue flowing.

 

The easy part: understanding how it works

Let’s begin with definitions of terms. Video syndication builds on a similar model, which was developed for television. TV syndication is the practice of selling the right to present a TV show in a specific geography for a specific time period, especially to more than one customer, such as a TV station, a cable channel, or a programming service such as a national broadcasting system. Daytime talk and game shows, sitcom reruns, original TV movies, reality shows are all great examples of syndication. The same show may appear on dozens or hundreds of individual outlets at the same time, and even more over an extended period of time, generating ad revenue everywhere and every time it appears. It’s a big business, supporting a $4.2 billion ad marketplace in 2010.

 

Taking this concept into the digital age, video syndication introduces the practice of digital content distribution: programming video players and applications to run digital content and distributing them across computers, connected TVs, tablets, smart phones, and mobile devices of every description. You can also think of this as player syndication, since the programmed video player is being syndicated across multiple outlets. Because the video player provides a direct channel to run a publisher’s content, player syndication and content distribution are in effect synonymous.

 

Now, how does video syndication actually play out? There are three main parties involved: content owners, distribution partners, and advertisers. In a typical scenario, a content owner works out a deal with a distributor to license and distribute its content across various outlets ranging from high-end aggregator sites to viral distribution environments like blogs, personal websites, and social networks. Meanwhile, the distributor sells advertising inventory within the video stream; this revenue is shared with the content owners and advertisers, according to the terms negotiated with each.

 

The hard part: actually doing it

The simple scenario described above masks quite a bit of complexity and heavy lifting behind the scenes. To monetize their content effectively, content owners need to license and distribute their content across a wide range of platforms and devices types. To earn as much revenue as possible, they need to incorporate the unique reach and value of each syndication partner’s audience into their ad sales programs. And to maximize their profits, they need to work out the best possible terms with the content owners, the advertisers, and each of their distribution and syndication partners. Any volunteers to be in charge of those spreadsheets?

 

If we break that out into three key challenges, it looks like the following:

  1. Selling and delivering custom sales packages that incorporate syndication partners: Part of the value of syndication for a content owner is that it increases and broadens the audience that can be sold to advertisers—but only if you have a simple, efficient way to package it, and to deliver the right ad to the right viewer at the right time. Ideally, your distribution is growing all the time—but the math changes for each additional partner and each additional format in each syndication environment and the complexity of campaign delivery increases dramatically.
  2. Enforcing complex business rules with advertisers, syndication partners, and the ad networks you use to fill unsold inventory, and managing which ads run when and where: Each player you syndicate will command a different eCPM, from premium aggregators to low-rent blogs; each piece of content you run in it may also have a different value. While you’ll often want to get the most revenue you can for a given piece of inventory, you also need the flexibility and control to address other priorities like fulfilling your agreements with your direct advertiser and agency partners. On a technical level, you also need to be able to serve the ads themselves everywhere they need to run and in the right format for the screen and device they are running on.
  3. Bookkeeping: For starters, you need a way to track how much is owed and how much has been paid to each of your syndication partners according to the variable eCPMs they command, the ads they’ve run, and the impressions they’ve actually delivered. To run a successful business, you also need visibility into how your video is performing across each partner’s site, how much revenue it’s generating for you, and whether your business is reaching its full potential.

 

One more requirement cuts across all of these challenges: speed. If you can’t manage your inventory, sell and serve ads, and manage your business at the real-time pace of digital media, you’ll quickly find yourself bogged down in back-end complexity and bookkeeping nightmares. Your syndication partners want to be paid in a timely manner—for smaller operators, it can be a matter of life and death—and if you can’t get it done, there are countless others who can.

 

How to make it work for you

Fortunately, the rapid growth of a lucrative online video advertising marketplace has inspired the creation of new technologies to make life simpler and more profitable for those involved. With a little due diligence, you can find a robust ad serving technology platform that lets you automate, simplify, and optimize your syndication business. The solution’s syndication management tools should provide functionality to address each of the challenges described above:

  1. Inventory organization and targeting to help you create and deliver custom sales packages that leverage the full value of your aggregated internal and syndicated audience. Ideally, this should be complemented by strong mediation features to serve your ads wherever they need to run without much—or any—technical work on your end.
  2. Simple business rule creation and enforcement to manage which ads run where, according to the terms of your syndication relationships, your business priorities, and the requirements of your advertisers.
  3. Complete and coherent reporting to track every aspect of your syndication business, complemented with automated tools for paying people what they’re owed in a timely manner.

 

With a platform like this in place, video ad syndication really can be as simple as 1-2-3. For many site owners, it already is—and as the market continues its explosive growth, you can expect to hear a lot more about the money they’re earning as a result. With a little research and the right tools, you can be earning it, too.



Jayant Kadambi has over 18 years of experience in the areas of networking, hardware architecture and semiconductors. Prior to co-founding YuMe in 2004, Jayant was Vice President R&D and Officer of Netopia, Inc., a publicly held manufacturer of DSL equipment and service provider for ISP’s and carriers. Jayant joined Netopia upon its acquisition in 1999 of StarNet Technologies, a VoDSL company he had co-founded. Prior to co-founding StarNet, Jayant held various technical and marketing positions in AMD’s networks division, and AT&T Bell Labs, where he worked on high-speed LAN systems, hardware and DSL technologies. Jayant received his BSEE and Masters in Electrical Engineering from Rensselaer Polytechnic. Jayant is the co-author of a book on Gigabit Ethernet and the holder of several patents in the networking arena.

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