Sometimes a company’s worst enemy is their own creation and Vidable, Inc. (PINKSHEETS: VIBE) may fall victim to this fate as the online video classified company has done a less than impressive job building an inventory of businesses willing to upload their videos to attract consumers. Taking a look at VIBE’s press release distributed on Tuesday in which they announced they would be placing their ad inventory in advertising auction networks the question becomes, what kind of businesses are willing to pay for advertising on a site that has minimal traffic?
It’s a tough spot for VIBE because they are relatively new to the online game, having just launched their online video classifieds website last month. That being said it’s understandable that the number of businesses utilizing the site would be limited but there are a few more concerning red flags that should be noted by investors.
Taking a look at VIBE’s website those concerns may become quite evident. While they announced on February 13, 2012 that their video content had increased by 237% that figure becomes less impressive when the total number of videos on the site remains minimal. Making matters even worse is that the press release didn’t specify when that increase took place, meaning investors have no idea how many new videos represent the content growth.
In addition, almost all the video content on the company’s site were uploaded on the same date and very few, if any, have been uploaded since. As stated by Lino Luciani, VIBE president, “Growing our video content is a vital part of our revenue model as this will keep consumers coming back to the site. Not only will it keep people coming back; it will also help with our ad inventory for our self-serve ad platform.” Well by the looks of the site they aren’t doing a very good job of growing video content.
This makes VIBE’s expectation of reaching 50,000 channels in 2 months extremely doubtful unless of course they just simply add the channels themselves and leave them empty. VIBE explained how they would be generating money from their business plan in this February 13, 2012 release stating “Ad agencies or businesses will be able to purchase targeted banner space on Vidable.com. For instance, insurance companies may want to purchase banner space in the automotive category. Due to the level of targeting options coupled with the high commercial intent by visitors on Vidable.com, advertisers gain distinct advantage advertising. This will allow Vidable the ability to charge more for their ad inventory.”
Unfortunately for VIBE they may find it hard to convince those ad agencies or businesses to advertise when there is no traffic to the site.
Earlier this week VIBE tried to impress investors with some industry projections, noting “According to eMarketer, US online ad spending is expected to grow 23% in 2012 to $39.5 billion; this follows a robust 2011 with a projected 23% growth rate to $32.03 billion. Advertising spending is expected to continue to shift online with internet ad spending expected to break the $40 billion barrier in 2014.” The chance of VIBE actually enjoying any of that growth is very limited based on their current situation.
It may be true that online ad spending will continue to climb and move past print newspaper and magazine advertising in 2012 but that doesn’t mean advertisers will just spend their money on any site. Right now advertising on VIBE is the equivalent of putting a billboard advertisement on a deserted road, nobody is seeing the message.
While Luciani has stated “The Company is creating a new way for local merchants and consumers to attract buyers and sell goods and services. The site will provide consumers with an economical and unique method to discover what to do, eat, see and buy in the local places they live and work,” It’s hard to see what’s so new about what they are doing. Adding video content? There are a number of sites that afford ad agencies and businesses the ability to upload video content as a means of attracting customers.
VIBE received a nice little boost earlier this week when their share price jumped to a high of 0.050 on Tuesday but by Thursday those shares were down to a low of 0.019 as many investors unloaded during the quick run-up. Shares are now holding around the 0.026 level but there is little reason to believe that they will climb higher based on real growth.
