Deal Radar 2009: Jivox

Directories such as the Yellow Pages are still important marketing tools for small and medium sized businesses. But with the services of companies such as Jivox, which specializes in online video advertising, small business owners can use DIY online marketing and communications tools to develop the same kind of sophisticated advertising as larger players. Founded by Diaz Nesamoney in 2007, Jivox is headquartered in San Mateo, California with offices in Bangalore, New Delhi and Mumbai, India. Nesamoney, who had has had two prior successful ventures in Celequest and Informatica, was looking for his next challenge but wanted to do something outside of his enterprise software background.

According to the Kelsey Group, which researches local media, local video ad revenues will show robust growth through 2012. The segment is forecast to rise from US$10.9 million in 2007 to US$1.5 billion by year-end 2012, a CAGR of 167.8%. Seeing the growth in online video, Diaz came up with the concept of a do-it-yourself online video advertising service for small businesses. He recognized that small businesses need to engage prospects online but didn’t know how to go about it and were concerned that was difficult and time consuming. Jivox aims to offer an easy and affordable solution for local businesses to advertise online with high-impact video without the need to work with expensive agencies or production companies. Today, Jivox is the leader in online video advertising, with only a few competitors, including Spot Runner and TurnHere.

In February 2009, Jivox launched a new version of its service, Jivox 4.0. The new version boasts of a click-to-action feature that allows viewers to take action without leaving the video and new in-depth dashboards that provide information on campaigns over time, comparative scoring, trend information and other measurements. The new version also includes the Video Engagement Score, a metric which allows advertisers to gauge the overall performance of their video ad against those of other video ads running on the Jivox Publisher Network. The Video Engagement Score assigns a value to the total user interactions with a video, weighted by response priority, divided by the number of video views and normalized to fit in a range of 0-100 where the median score is 50.

The Jivox business model is primarily ad revenue based on a unique cost-per-view model. Jivox charges customers only for a fully viewed video, not based on impressions. The equivalent CPM rate paid by Jivox customers is $15. The company has 3,000 registered users with Web traffic of 4,000 unique visitors per week.

The company is VC funded and has raised more than $13 million: a $2.7 million seed round led by Opus Capital in March 2008 and a $10.7 million Series A led by Opus Capital in June 2008. Jivox doubled its customer base and tripled the number of ad views in Q4. Though revenue grew fourfold in Q4, Jivox is not yet profitable. In January 2009, the company was named a winner of the AlwaysOn OnMedia 100.

Suggested Reading:
*Deal Radar 2008: PermissionTV
*Cracking the Online Video Monetization Nut: Adap.tv CEO Amir Ashkenazi

This segment is a part in the series : Deal Radar 2009