Personalized online video advertising is a segment of the market that continues to heat up, as evidenced by a rash of IPOs and other financial good news. One start-up, SundaySky, just snagged $20 million in Series C funding. That brings the company’s total to $40 million—not too shabby for a fledgling technology.
SmartVideo is the company’s main platform, which is accessible in a SaaS model. The platform determines contextually relevant information to deliver ads to the consumer in near-real-time, it said, based on behavior. It also has a platform to track performance of the spots and prove user engagement. In all, SundaySky has delivered 140 million views since it launched in October 2011, it said. Customers include some heavy hitters, including AT&T, Allstate, Comcast, Office Depot and Lenovo.
The round was led by Comcast Ventures, with participation from new investors Liberty Global Ventures and Vintage Investment Partners, as well as existing backers Carmel Ventures, Globespan Capital Partners, and Norwest Venture Partners. Comcast Ventures managing director Andrew Cleland will be joining SundaySky’s board of directors.
The funding news is the latest in a string of news in the video ad sector. YuMe, which offers a targeted video ad platform, had a successful IPO in September, raising $46.1 million. The stock hit a high on Sept. 26 ($12.08) after launching a targeted ad capability. Earlier in the summer, Adap.tv took $405 million in cash from AOL in a sale, and Tremor Video and RocketFuel have also had successful IPOs.
“From our perspective, it’s market validating to have Tremor Video go out [its IPO was in June] and now Adap.tv,” YuMe CMO Ed Haslam told Forbes. “All those things roll up to be great opportunities and market validating facts.”
“Today is an exciting time in digital video, as evidenced by recent moves such as AOL’s Adap.tv acquisition and RocketFuel’s soaring IPO, as well as funding announcements from fellow personalized video providers Idomoo and Eyeview,” said SundaySky CEO Shmulik Weller. “What’s even more exciting is the CMO-CIO convergence (Gartner says CMOs will spend more on IT than the CIO by 2017) and the changing landscape of marketing platforms.”
He added, “Video, big data and customer experience are now strategic to the CMO suite, which is looking holistically at digital engagement throughout the customer lifecycle and how their technology investments can support this. Personalized video is becoming recognized as a key innovation in this regard.”
All of the activity is unsurprising considering that video—if it can be delivered in a way that’s relevant to the consumer and not considered intrusive—is arguably king of the hill when it comes to consumer engagement with brands. But, as any of us know who spend any time on, say, online news sites, scattershot, irrelevant, noisy video ads are just annoying. There’s also some dispute as to whether the studies that show online video outstripping TV ad engagement (and there are plenty of them) are in fact accurate.
And that’s where personalization comes in. Ad effectiveness in the online video world essentially comes down to targeting (while, ideally, avoiding privacy concerns). So, better targeting means higher CPMs and better monetization for online content.
Companies that can leverage the unicast nature of online video to bolster viewer brand engagement in a proven way are well positioned to capture market share, especially since worldwide traditional TV ad spending – as well as display advertising – is shifting to online media video campaigns.
A recent survey from Be On, the AOL-branded content division, showed that 73 percent of respondents said that they were taking some of the dollars that were previously earmarked for TV and putting them into online video advertising. Although TV is considered a key "awareness" producer, 78 percent of respondents in Europe and 58 percent globally said they could achieve greater engagement and scale with online video.
Crucially, more than 80 percent said that audience and content targeting as main factors when planning a new branded video campaign. Better audience targeting (73 percent) and measurement (67 percent) were mentioned as key reasons for increasing online video spend in the future.
Edited by Alisen Downey