Summary:

GoldSpot Media is looking to tap the nascent in-app advertising space by delivering video pitches to consumers. And the company hopes to differentiate itself with technology that delivers “opportunistic downloads” that minimize traffic on cell networks and store content directly on the handset.

GoldSpot Media is one of a small army of companies looking to deliver video ads within mobile applications. But unlike its cohorts, it’s also trying to ease network congestion — by delivering its ads at very particular times.

The Sunnyvale, Calif.-based startup launched in 2006 with an eye to delivering ads within streaming video, but that opportunity fizzled as broadcast companies like Qualcomm’s FLO TV failed to gain traction with mobile users. So it turned its technology to applications, creating a drag-and-drop offering called miApp that enables publishers and ad agencies to add various types of video ads to their apps and deploy them across app stores and devices. The offering is the foundation of an interactive ad network that will launch “pretty soon,” according to co-founder and CEO Srini Dharmaji.

GoldSpot pocketed $3 million in a Series A round of funding two years ago from Exa Ventures and hopes to close a second round in the third quarter of this year. While mobile video advertising is still a very small space, established players like AdMob, which was purchased by Google, and Millennial Media already loom large on the field. But Dharmaji claims a key differentiator for GoldSpot is how it delivers ads: while the bigger ad networks stream video ads from the network, GoldSpot uses what he calls “opportunistic downloads” to download campaigns in ways that minimally weigh down cellular networks.

“We detect when a device is connected to Wi-Fi, for example, and opportunistically download the campaigns that are running for the month, so we don’t tax the 3G network in the process,” Dharmaji told me. Meanwhile, an app running on the cell network could receive the ad in the background and cache it on the phone to be presented later. “The app is released into the app store and is downloaded by the user. He starts the app and doesn’t see any ads in the first run, so the next time the user comes back he sees it.”

The technology also delivers content during off-peak times, “waking up” devices to cache ads overnight or during other periods when network congestion isn’t an issue. That strategy enables GoldSpot to deliver higher-quality video, according to Dharmaji, and to play ads quickly once they’re cached. The technology supports a variety of video ads including split-screen and interstitials, giving advertisers and publishers the freedom to choose the best type for their apps and pitches.

At this point, just how much opportunity exists in mobile video advertising is far from clear. In-app advertising is very much a new space where revenues can be hard to come by, and ads can be intrusive and off-putting. That’s especially true of video ads that can seem out of place and even jolting in non-video applications. And GoldSpot has its work cut out for in competing with entrenched, deep-pocketed players like Millennial and AdMob. If GoldSpot can present higher quality video ads, though — and if it can help carriers address increasingly important congestion concerns — it may be able to compete with the Goliaths in the space.

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Image courtesy GoldSpot Media

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