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Summary:

Adap.tv, a online video advertising company that changed strategies earlier this year after dipping a toe in the market, has seen enough luck with its second try to merit a big $13 million funding round from new investor Spark Capital and returning investors Redpoint Ventures and […]

Adap.tv, a online video advertising company that changed strategies earlier this year after dipping a toe in the market, has seen enough luck with its second try to merit a big $13 million funding round from new investor Spark Capital and returning investors Redpoint Ventures and Gemini Israel Fund, bringing its total funding to $23 million.

San Mateo, Calif.-based Adap.tv’s initial product was contextually targeted overlaid videos, similar to ScanScout, but earlier this year the company moved to fill another need for publishers: finding the most valuable ads to show on a particular video by comparing a spread of ad networks and a publisher’s internal sales.

The new product, called Adap.tv OneSource, is centered upon compatibility with anyone and everyone in video advertising, from ad networks to ad formats to ad serving platform to custom video players, and incorporates custom rules for determining which ad is most lucrative and appropriate at any given time. Alongside the strategic shift, the company laid off some of its no longer relevant team and made new hires.

Because I’m traveling, I wasn’t able to talk to Adap.tv to try to get a customer list, but if I can procure one tomorrow I’ll update this post. I do find it interesting that the company jumped out of its initial market given how early it is, but it’s also hard to say yet whether that reflects badly on the market or not. The CEO of former competitor VideoEgg says the market for in-video ads will be worth only $50 to $60 million this year for companies other than YouTube, and even YouTube is supposedly considering showing pre-rolls.

Note: Just for full disclosure’s sake, another startup in the video advertising space, BrightRoll, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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  3. This is a pure tech play – hoping that being a single gateway to the various video ad offerings and taking a percentage of the play – ala The Rubicon Project or PubMatic. This could turn out to be a winner in the long tail but may not play out well in the head and body… it’s way too early to know though.

    Video Egg is about as reliable of a source as Lehman Bros. They are on their 4th business model in so many years. Its no wonder they ran from Video ads – they couldnt execute well enough to justify their burn rate. Chasing the trend is never a good business.

    Video Ads are a goldmine but the technology is too disparate to make it viable for large ad buys AKA reach. That is changing however and these companies will be on the sidelines because their VC’s are demanding ROI.

    Patience will pay off big time in the video space

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