Online Video Advertising that Works?

Here's a new approach to online video advertising.

VideoClix.tv is a video sharing site that seems to have found a workable solution to the monetization dilemma plaguing YouTube. While YouTube is experimenting with choose-your-own pre-roll, mid-roll, and post-roll "promoted video" ads, VideoClix steers away from the "tv commercial" approach altogether.

Instead, VideoClix uses its own Smartrack technology to add dynamic (moving) hotspots to the uploaded video. The hotspots function rather like "tags" on Facebook photos; as the viewer rolls the mouse over images in the streaming video, labels appear. The viewer can click on a labeled hotspot to see a relevant advertisement appear in a sidebar to the right of the video screen. If interested, the viewer can then click on the advertisement to open the advertiser's website in a new browser window.

For example, in a video of Maui honeymoon spots by The Knot wedding planning website, hotspots connect to ads for the Hawaii Visitors & Convention Bureau, The Four Seasons Resort Maui at Wailea, National Geographic, and The Knot.

Although VideoClix seems to be slow in gaining contributors (due in part, I suspect, to their business model - with their $5,000/year license fee, they are seeking corporate- and network-created content, not customer-created), I think this advertising model is a winner. Viewers are happy, because they see ads only if they are interested in the material, and the ads do not interrupt the video. Advertisers are happy, because their ads are reaching the customers who are actually interested in their products and services. It's a win-win (as any good business deal should be).

I hope that the VideoClix method catches on. Perhaps if waiting for more contributors isn't working, VideoClix should license their technology to YouTube instead.