Deal Radar 2008: YuMe

YuMe is a broadbrand video advertising network that allows publishers to organize their content into various categories that can be delivered to any device. Co-founders Jayant Kadambi and Ayyappan Sankaran realized that the video ad networks were mere extensions of text and banner ads and that the video ad network had a tremendous potential for monetization.

Unlike its competitors, YuMe isn’t automated and uses human filtering to screen content and to categorize, when dealing with user generated content. With most of the video on the net being user generated, human filtering ensures that the relevant ads are placed with the relevant content. It also allows advertisers in maintaining the brand value as inappropriate content is weeded out. My question: can human filtering be scalable?

YuMe also relies on tags and metadata by content creators who label their work well and uses it to organize the ads. YuMe’s competitors include VideoEgg and ScanScout, as well as Adap.tv. Last summer, I did a rather lengthy interview with the CEO of Adap.tv, which you can read for context.

But what really seeks to give the advertisers on YuMe their true worth is ACE— it’s Adaptive Campaign Engine. It helps publishers achieve the highest fill rates and the most effective CPMs by matching every video ad impression in their inventory with the best monetization opportunity either from their own sales team or a third-party seller.

Its recent partnership with SpotXchange is pitched to be an added advantange to the publishers. YuMe’s publishers will now have the option to serve SpotXchange ads if they choose to be a part of the SpotXchange auction, increasing their options of inventory fill rates and revenue opportunities. Inventory fill-rates are a huge problem for publishers in the online media world today.

Headquartered in Redwood City, YuMe monitors all distribution with its analytics package that allows geographical targeting down to the zip code. YuMe has raised a total of $16 million so far: with $7 million in Series A funding from Accel Partners, BV Capital and Khosla Ventures and another $9 million in Series B funding from Accel Partners, BV Capital, DAG Ventures and Khosla Ventures.

YuMe’s client list includes: BitTorrent, HouseValues.com, MSN Video, True.com, Azureus, Southwest Media Group, and Pando. It recently announced that its in-stream video technology is being powered by the ‘Tickerboy’ technology by PointRoll. This will help integrate an interactive banner ad within a streaming video without hindering the viewing experience. When a user clicks on the ad, the video will pause and the ticker will either launch a video or play the ad within the player window. This came after its announcement that YuMe publishers who are also AdSense customers can also accept AdSense for video ad placements to the rapidly growing online video space.

In April 2008, the company announced the beta testing of its AdMe Campaign Window. AdMe Campaign Window is a desktop utility that allows advertisers to monitor and optimize their online ad campaigns in real time. The tool will give the advertisers full control to evaluate their campaign and make changes in real time and ensure that the performance metrics of the campaign are met.

According to eMarketer’s July 2007 report, video ad sales are expected to $3.1 billion in 2010. With the market still largely in experimentation mode, however, YuMe certainly has its work cut out.

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