West L.A. ad tech firm SocialVibe has always made interactive ads that pop up before online articles on the website of the Baltimore Sun, games from Zynga and songs on Pandora.
But now SocialVibe, which changed its name last week to TrueX Media, has an added focus: emphasizing interactive ads that precede streaming videos from digital producers such as Vice Media. It is also approaching the big names in YouTube production such as Machinima and Maker Studios.
TrueX Chief Executive Joe Marchese said he thinks his interactive ads are a good fit for online videos because many producers get millions of views but little money from ads on YouTube and are looking for new models. He said interactive ads can be priced higher. But they have to be customized.
“Online, people won’t put up with eight minutes of ads for 22 minutes of content,” Marchese said.
TrueX creates ads that give viewers the option of either watching an ad or interacting with it by answering questions about their preferences. For example, an ad created for Home Depot asks people to select which flooring they like best in the rooms of their homes. Viewers must spend some time with the ad to get to the video; they can’t hit “close.”
TrueX targets viewers based on their location, as well as information they’ve provided in the past, such as gender and age.
Marchese said brands will usually pay between 25 cents and 45 cents for each person who participates in a survey, meaning publishers can recoup anywhere from five to 15 times as much revenue compared with a non-interactive ad.
TrueX has 60 employees and makes money by splitting ad buys with publishers. Marchese said TrueX’s split is typically less than half. The company does not charge for creating the ads. He said annual revenue is more than $10 million.
The interactive strategy isn’t without risk. When giving viewers a choice of participating in an ad or passively watching it, there’s always the chance they could be turned off and leave the website.
Scott Grimes, chief executive at Culver City digital advertising and publishing firm Woven Digital, which handles advertising for the popular men’s website TheChive.com and others, said it will be important for TrueX to keep the advertisements relevant to the user.
“The last thing we want is to alienate the user base,” Grimes said. “The creative has to be super specific.”
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