Searching for the next big canvas for ads
As a partner in Kodiak Venture Partners, Meakhem was an early investor in Massive, which embeds ads and movie trailers into video games. Microsoft bought the company last year.
"Gaming is the third biggest activity for males from (ages) 14 to 35, and there was no advertising in it," he said during a lunch meeting. "You could see it was going to be a big."
Recently, he was behind the firm's investment in HangerNetwork, which sells ad space on the cardboard, eco-friendly coat hangers given out by dry cleaners. The company has already sold millions of dollars worth in advertising to Dunkin' Donuts, Van Heusen and other companies. He says a deal with a media conglomerate is coming.
If you're one of those people who hate ads and intrusive commercialism, now you know that Meakem is who you despise. But advertising subsidizes a lot of free services, such as television programming and Google. So someone might as well figure out clever ways to do it.
(Editor's note: I'm on a new mission: to eat lunch with people and ask them about their job. Think of it as an ongoing but sporadic series.)
What's next? More ads on peer-to-peer networks. Some companies, like Intent Media, are experimenting with releasing legal, licensed music on these networks and then making money off ads. Free music won't go away, so the next best thing may be to turn these networks into ersatz radio stations. Whether they can sell enough ads to offset the cost of the content remains to be seen. (Kodiak is not an investor in Intent.)
The online infomercial also shows promise. Kodiak has invested in iAmplify, a video network that streams self-help videos from Tony Robbins (of "Feel the Power Within" coal-walking fame), Marilu Henner and poker champ Phil Hellmuth. Phil sells his complete series for $150. It's the love child of YouTube and the Learning Annex.
IAmplify will soon do a self-publishing service, so local Yoga instructors can sell sessions online for a fee. The company takes a cut of the transactions.
The trick of finding a decent canvas for ads largely revolves around seeing spots that are both obvious and unnoticed. Massive, for instance, lined up a deal with a publisher of a shoot-em-up game that happened to have a drive-in movie theater in one scene. Massive started running movie trailers on the screen. In the chat rooms, players would talk about getting together to watch a few trailers before setting out for some cartoon mayhem.
It's a bit of a conspiracy theory, but Meakem also speculated that the love affair network TV has for reality shows has something to do with placating advertisers. Reality shows to some degree have an inherently transitory entertainment value, he posited during a lunch meeting. If you don't watch it that night, you'll read about the ending the next day. Thus, viewers should gravitate to watching them live rather than record them on a DVR, thus appeasing advertisers.
Fear of the DVR could also explain why a number of reality shows often end past their official ending time, even though the shows are scripted. Once viewers realize that it's tough to program a TiVo box to properly catch the ending, it might encourage them to watch live TV. Network executives feel they have to do something.
"DVRs will be in half of the homes in the U.S. in a couple of years and people will watch 80 to 90 percent fewer ads," he said.
