Virool (YC S12) Raises $6.62 Million “Seed” Round To Help Make Videos Go Viral
techcrunch.com
techcrunch.com
Then there's this:
> “All [Jimmy Kimmel] had done was expose [the Double Rainbow] video to a couple hundred million people who would find this video interesting to them,” Debelov says. (Actually, [Kimmel] tweeted it to his 90,000 Twitter followers). “We’ve taken that process, and reversed engineered it. We can’t guarantee your video will go viral because it all depends on your content, but we can get it in front of a million, two million, half a million, whatever your budget is – we can get you in front of that audience.”
You've reverse engineered the power of celebrity? Highly doubtful. When a comedian with the clout of Jimmy Kimmel calls something the "funniest video in the world"[1], his fans are going to watch that video. When those same people see a video advertisement at the bottom of a blog post or in one of their mobile apps, they're going to ignore it. Hell, even celebrity has its limits -- Kimmel's suggestions would be ignored if he started posting random videos rather than specific links of his own choosing.
Anyone born after 1980 has been conditioned since adolescence to ignore online advertisements. It's gotten to the point where you have two choices: 1.) Make your ad so obtrusive that it might actually cost you users, or 2.) Don't infuriate your users, and settle for a CTR of .01% on a good day. I can only see this service reinforcing that conditioning.
We can't help our advertisers create good, engaging content, but we can help with distribution. We can get their video infront of people through our network of publishers, but if their video (content) sucks, it's not going to catch on.
We are not looking to become a solution for promoting viral videos. We are building a Google AdWords for video solution with distribution taking place on Facebook, Mobile Apps, blogs and sites.
So when you talk to journalists you never know what part of whole conversation they will highlight:) I am not a fan of this example too, i dont think it represents well what are we doing as a company, but a lot of them catch this since it corresponds with our catchy name.
the idea of our service is simply to get relevant videos in front the right audiences. as someone below correctly commented its essentially AdSense for Videos. since we dont have fixed ad units but rather offer API to developers its up to them how obtrusive/native they want to place it. so far we have seen both very abusive and very nice implementations when video was nicely integrated in some games natively.
When we were doing diligence on Virool we ran our own tests with the platform. We took one of our portfolio company's videos and Spent $300 promoting it. At the beginning the video had 15 views and 0 likes. We were able to finish the campaign in a day, and at the end there were 7322 impressions and 3000 views. Note that Virool only charges when a video has been watched for 30 seconds. The conversion of and impression to a 30 second+ view was above 35% for all of our campaigns and on mobile it was 70.32% (not that it mattered because you aren't charged on conversion of impressions).
The next day we had 5483 views, 28 likes, and 10 comments (almost all positive), without having paid for the incremental boost.
Your point about decreasing value and fake video promotions doesn't hold true with this test nor the experience of other customers. The views are not fake, they come from actual individuals who watch for 30 seconds from legitimate publishers. If they weren't then YouTube could strip a customer of their views as they did with Lady GaGa who lost 156mm views [1]. This hasn't happened once for Virool.
If you watch a video for 30 seconds it is highly doubtful that you are ignoring it. Virool doesn't do bottom of the page video pre-rolls that won't be seen but are counted as a charged view. If you are in an app, it seems odd that you would assume every user ignores a video for 30 seconds. You are correct that there will be plenty of people who do ignore, but as a Virool customer I am not getting charged when this occurs so it doesn't seem like a strong argument why their business is flawed.
Finally, you may feel that people after 1980 have been conditioned to ignore ads, but if companies like Facebook and Google are making billions in revenue from digital advertising, I doubt that marketers are shoving money their way if no one is looking at their ads. In 2012, US digital video advertising was estimated to be around $2.9bn out of a $37.3bn bucket for digital ad spend [2]. The market is still nascent and there is a continued shift of advertising dollars to online and mobile from the classic channels (print/tv/radio). The market isn't anywhere near saturated and I doubt it will be anytime soon.
[1] http://www.huffingtonpost.com/2013/01/29/lady-gaga-youtube-v... [2] http://www.emarketer.com/newsroom/index.php/digital-ad-spend...
Also, a video getting that many legitimate views in a day should have scored consecutive views in the following days - of course this is the nature of a video going viral.
"Tried running some videos with Virool. Couple of things I didn't expect:
1. Even with very precise targeting, my entire $100 ad budget was eaten up right away. We're talking seconds - minutes.
2. I was charged for views after just a few seconds of starting the campaign, even though the video is several minutes long. Clearly they are not restricting charging to actual completed views. "
Just like email could be used to reach large numbers of people in a short time, spam attempted to destroy it.
Eventually this will devolve into 'video spam' where you'll be bombarded with links to videos in the hope that they will go viral. Fortunately the cost of producing any video is so large that this will dampen the flood but if there are companies that aim specifically for virality of content then that is a sure sign that we're about to see a shift.
Eventually viral videos will die out because too many impulses deaden the nerve and then another useful and nice to have thing will have been murdered. Virality is the mark of excellence of a successful meme, something that should work its own way because you showed it to a small number of people and they decided to reward your work with a reference and so on. Forcing virality by dumping a video in front of a large number of people will simulate the effects of virality by using a starting group large enough that the eventual effect will be indistinguishable from virality.
But it is not the same as virality. A viral campaign costs outside of the original production costs next to nothing and is proof you got it right. If you have to force virality you are actually saying that your video is not all that good.
So users of services like these should realize that they are essentially admitting their content is not the real thing.
No...I think you got it's value pretty dead-on there.
Here key figures means people who are interested in your video, have the personality to share videos and are charming enough to have a following that enjoys them (and perhaps includes more key figures).
Also there Virool guys seem to have spend a rather large fraction of their seed finance on the video funny that sells their service :P
I used to think
- Seed round was raised from friends and family - but this one has tonnes of institutional investors.
- Seed rounds typically raise <1mm at <10mm valuation - but this one raised 6mm+ (at maybe 50-60mm valuation?)
- Seed rounds happen before the business is well defined - also not true in this case.
So why is this called a seed round and not a Series A?
Your other point is a good one. If there was no valuation and only convertible notes were issues, then I understand why this would not be a Series A.
Now that convertible notes are the dominant form of financing seed rounds, I usually see money raised with debt as seed, and money raised by issuing stock referred to as the A round.
I would rather divide 7 mil.$ between 10 good startups instead of 1 like this.
We are definitely in a bubble ...
In search marketing, the question is "Can we get to top of Google?"
And the answer can be yes if the client is willing to go pay-for-play (AdWords).
So these guys basically built their own platform to do pay-for-play, I'm assuming.