Sponsify Aims To Become The Platform For Product Placement And Other Native Ads On YouTube

A just-launched startup called Sponsify is looking to bring native ads to YouTube in a big way.

I doubt anyone who visits YouTube is complaining about a shortage of ads, but those ads mostly take the form of pre-roll videos and promoted content off to the side. Sponsify, meanwhile, will focus on ads that are integrated with content in more meaningful ways, for example through product placement in the videos.

Those kinds of campaigns could be valuable to advertisers and lucrative for creators. The challenge until now, according Sponsify co-founder and CEO Muhammad Huzaifa, is that the only way for those creators to run native-style campaigns is to connect with multi-channel networks like Maker Studios and Machinima. However, that can be a bigger commitment than creators want — Hufaiza said 60 percent of MCN contracts include perpetuity clauses.

“[Creators] don’t have an independent platform where they can actually source advertisers for their content,” he said.

So Sponsify is supposed to fill that gap, allowing brands to find creators who reach a desirable audience. They can then propose campaigns such as product reviews or endorsements, YouTube channel promotions, the creation of viral videos, and sponsored Facebook or Twitter messages.

The company is still very early — Huzaifa said he and his brother Muhammad Jehanzaib only started working on the platform “six or seven weeks ago.” The two-person team is currently based in Karachi, Pakistan, with plans to relocate to London. And it hasn’t run any campaigns yet. Nonetheless, Hufaiza said there’s already been significant interest from creators, with 100 channels signed up, collectively reaching more than 10 million subscribers.

When asked if there are any issues with transparency and disclosure, Hufaiza pointed out that similar campaigns exist on YouTube already — but again, there’s no efficient way for advertisers to find and directly contact independent creators. And yes, the text description of a video should include some type of disclosure, but he added, “It doesn’t really matter for the average viewer of the video.”

As for tracking the effectiveness of these campaigns, Hufaiza said there’s “a huge amount of data” that the company can make available by using YouTube’s API.

Sponsify is just the latest startup looking to bring these kinds of campaigns into new online formats. Earlier this month, MediaSpike raised $5.2 million to bring product placement into mobile and social games.