With the new performance guarantee, both viewer engagement (time spent watching) and click-through rates that under-deliver on NeoEdge’s promise, will result in “makegood” impressions – about 25% additional impressions on average. (Initial benchmarks will be set based on consumer’s prior behavior).

“Online video advertising is so new, ad dollars are shrinking and the economy isn’t very good,” Ty Levine, VP of marketing at NeoEdge told ADOTAS. “I can tell someone till I’m blue in the face that their ad is going to perform, but without a guarantee, a lot of advertisers are reluctant to jump into the unknown.”

Over the next six months, Levine expects an increase in 300% to 500% in advertisers due to this program alone. “When they actually try it out, they come back,” Levine said. “It’s just getting past that step of trying something new.”

The tactic seems to be working: one high-end cosmetics brand has signed on as a result of NeoEdge’s new offering (Levine couldn’t name names).

This latest move comes on the heels of NeoEdge’s recent partnership with Yahoo Games. Through this partnership, NeoEdge delivers an end-to-end advertising solution with pre, mid and post roll ad slots that integrates easily with the Yahoo Games site and extensive game catalog. NeoEdge’s NeoARM ad enabling technology does not require source code to ad-enable the games.

(Advertising-phobes can still pony up $20 to download an ad-free version of the game, Yahoo said).

Yahoo Games is already the #1 online gaming site according to comScore – and it has been since March of 2004. But the partnership with Double Fusion and NeoEdge will bring casual gaming to a whole new level, Kyle Laughlin, the head of games at Yahoo told ADOTAS.

“Casual gaming is exploding right now,” Laughlin said. “Because of our wide range of games we’ve amassed a massive casual gaming audience with about 18 million unique visitors a month. Our demographic spans all ages, but we’re strongest in the 21 to 54 range, with equal numbers of men and women playing.”

Yahoo’s partnership represents a strategic shift for the company: it’s now focused on becoming a “must-buy” for interactive advertisers that are “interested in creating innovative ways for advertisers to speak to our demographic,” Laughlin explained.

NeoEdge and Double Fusion will split the number of games they work with down the middle.

NeoEdge has been devoted to casual games for about three years – it will employ its NeoARM ad enabling technology, in addition to its ad network NeoAds and it sales force, to deliver a suite of ad-supported games. Alex Terry, CEO of the company, said that while people worldwide already spend between 20 billion and 30 billion hours playing casual games a year, Yahoo’s decision to make the games free will open the floodgates.

“The ad-supported model will bring in a whole new group of folks who weren’t willing to buy the game for $20,” Terry said. “And we want to insert the ads in such a way that makes them appropriate for consumers, Yahoo and advertisers … We also focus on pre-roll, mid-roll and post-roll high-quality video and rich media so the user will really have a premium experience and enjoy the ads.”

NeoEdge’s targeting technology is based on an analytic platform that tracks gamers across a number of sites and records their game preferences, playing times, age, geographical location and other indicators to get the right ad to the right person at the right time, Terry said. The company sees click-through rates of between 2.5% and 7.5% and high brand retention.
For its part, Double Fusion will lend its core expertise, fusion.runtime, technology to Yahoo Games – along with its ad sales force.

“There’s a game for everyone at Yahoo Games – and Yahoo is taking a remarkably progressive, industry-changing step by becoming the largest ad-supported download gaming site,” said Jonathan Epstein, president and CEO of Double Fusion. “For us, videos between game levels will be our major stock in trade, but we can also move way beyond that for brands that are interested. We can replace textures in games; for example, we could replace a three of sticks tile in a Mahjong game with an image of a soda brand.”

At launch, ad-supported downloadable games on Yahoo! Games will be available from top publishers including Alawar Entertainment, Anarchy, Big Fish Games, eGames, Floodgate, Freeze Tag, FreshGames, Funkitron, Gogii Games, GameHouse, Gamemill Publishing, HipSoft, I-Play, iWin, Last Day of Work, Legacy Interactive, Ludia, MumboJumbo, pixelStorm, PlayFirst, Playrix Entertainment, PopCap, Reflexive Entertainment, Sandlot Games, Sugar Games, TellTale Games, TikGames, uclick, Worldwide Biggies and Zero G Games.

By year end, all 400 games in Yahoo’s library should be ad-enabled.