How to Earn a BS Degree in Media - Jaffer Ali - MediaBizBlogger

Every time I begin another trade article, my business partner, Tom Zegar, holds his breath. He's always afraid I'm going to insult someone. In fact, right before I left on my just concluded vacation he asked me why I felt the need to be so abrasive.

I didn't have an answer for him then, but the void imposed by my time away from the office helped me to better understand myself and the reason why so many of my essays and/or articles have an edge:

I am just sick and tired of the bullshit.

If this all sounds a little too Howard Bealesque, so be it. I tread in his wake with full knowledge that he was insane, mindful that my own sanity may be (probably is) open to debate.

I've been in the media business for 29 years (enough to drive anyone insane), longer than many of our industry "experts" have been alive! But please don't confuse longevity with any special virtue. I merely seek to establish a time line that qualifies my viewpoint.

Before owning the Vidsense video network, I was a media buyer. Not in an agency capacity per se, but for brands my company controlled for the home video marketplace. Our big break occurred in 1983 when we secured exclusive worldwide distribution rights for the Beatles' video A Hard Day's Night.I was the lucky guy responsible for all US marketing. Help! and Magical Mystery Tour videos followed on the heels of our success.

I should humbly add that marketing the Beatles takes about as much cleverness as selling water in the desert!

Then in 1985, the hit video Superbowl Shuffle featuring many of the Chicago Bears fell into our lap. Fast forward to our direct response days of 1996 and 1997, and we found ourselves buying millions of dollars of television time for our Riverdance and Lord of the Dance campaigns. Every ad dollar came out of our own pockets. So believe me when I say that if you really want to understand media buying, try doing it with your own money, and trust that when I express my opinion, I do so from the perspective of one who has risked his own capital in the media arena and walked the talk.

In 1998 we discovered that owning our own media allowed us to play both sides of the fence. We sold what we could at retail and then finessed any excess capacity on our own behalf at cost. We owned 77 online media properties (we called them our Owned and Operated…or O&O for short) and aggregated about 1000 other properties to sell their advertising inventory as well. We continue to buy media for our considerable e-commerce division, most of which comes from media we own.

We were in the e-zine, email space before SPAM started to choke inboxes. In short, we made a fortune selling to Zing.com, eToys, Pets.com and a host of dotcom fliers that were soon to be grounded.

The personal downside to that time was dealing with media buyers who knew very little about their craft. This was when the BS started to get pretty thick. My partner rarely had to deal with it. He was too busy guarding the checkbook.

In 2004, we morphed our media business from lowly email to high tech video streaming… before YouTube. We did not go the UGC route, but licensed content from over 60 home-video labels. We created a video portal with thousands of licensed TV and movie clips.

We began by monetizing every view with our own commercials. First we tried :60 spots…then :30s. We signed NetFlix to sponsor every clip and soon discovered that views per visitor declined through the use of pre-roll. This played havoc with our financial projections as we eventually discovered that consumers would not tolerate more than one commercial per three video views.

But the industry BS was in full gallop. Experts pontificated on the virtues of pre-roll from both advertiser and publisher POVs. Nobody was taking the broader ecological POV, from licensing content, streaming, advertising revenues, user experience, etc.

In short, so-called experts did not know their proverbial asses from the proverbial holes in the ground. I remember speaking to licensing folks at Comedy Central who were demanding a 90% royalty! When I suggested that this was impossible to make work, they politely suggested that this was the "going rate."

HULU reportedly pays 70% royalties… Revver paid 50%. Is Revver even still in business or have the VCs that poured so much money into it since retired?

The video portal business is a lousy model, which we learned the hard way. So when you see an article on the bright future of pre-roll, do yourself a favor and label the writer a fool and move on. But the video portal business did pave the way for Vidsense.

Vidsense has put us back in the network media biz. But unlike the email networks of our youth, Vidsense is a pay-per-visitor video network, which at last count comprised more than 50,000 participating websites. And the best part? Our e-commerce division buys 90% of all clicks generated from our own network.

What does this mean? It means we don't have to sell our media because we're too busy consuming it. Sure, we also sell to others at retail, but only if they contact us. And when I say us, I really mean yours truly. The fact is, we have no media sales staff. Why? Because we don't care if it goes unsold… we can always eat it ourselves, and we can always make more.

A weird thing has happened. The less we try to sell our media, the more of it we sell. I think it's because we've learned from our mistakes and eliminated all the bullshit. Now if I could just convince Tom to stop holding his breath.

About Jaffer AliJaffer Ali is CEO of Vidsense, the Web's largest video advertising network. With more than 80,000 advertiser-friendly video clips licensed from major film and TV studios, the Vidsense network of more than 50,000 safe-for-work partner websites delivers millions of qualified visitors directly to advertiser websites on a pure Pay-Per-Click (PPC) basis.