Deal Radar 2008: Adap.tv Trying to Tackle the Video Ad Problem

After the success of shopping.com (now owned by eBay), Amir Ashkenazi, stepped into the hairy world of video advertising through his recently founded Adap.tv in Nov 2006. It claims to provide publishers and advertisers the best tool to make video ads more effective without interrupting the streaming flow. [see interview: Cracking the Online Video Monetization Nut: Adap.tv CEO Amir Ashkenazi]

Today, both publishers and advertisers are confused while choosing ad placement into video content. Publishers are also struggling to put video ads more effectively without distracting the viewers.

Against that backdrop, Adap.tv comes forward with the value proposition of enabling advertisers and publishers to put the right ad at the right time into video content. I have expressed my skepticism about the technology, since just because I am watching a car chase doesn’t mean I am ready to buy a car. Nonetheless, Amir is smart, and his company is on my deal radar because the problem is an important problem to keep an eye on. Adap.tv has a good example of a Kayak Ad inside a travel video on Paris. Yes, this one has a good contextual nuance capture.

In Feb 2007, Adap.tv raised an undisclosed amount from fellow Israeli fund Gemini Capital. In July 2007, further it raised $10 million in Series A funding led by Redpoint Ventures.

Amir Ashkenazi claims that publisher and viewer growth is doubling month-over-month and that the company serves ads and pays publishers on almost every video view. Their current advertisers include Amazon, Kayak, EVOgear and Let’sTalk. They also have a content partnership with MetaCafe.

eMarketer expects US online video advertising to be around $4.5 billion in 2011.

So far, however, the true “video advertising” potential has not been realized. Google is monetizing YouTube mainly via AdSense, not with “inline video ads” but rather with “adjacent display ads”.

This segment is a part in the series : Deal Radar 2008