Summary:

Online ad tech firm Collective has acquired rich media marketing services provider Oggifinogi in what appears to be the latest sign of conso…

Joe Apprendi, Collective

Online ad tech firm Collective has acquired rich media marketing services provider Oggifinogi in what appears to be the latest sign of consolidation in the video ad space. The deal, terms of which were undisclosed, comes nearly three years after Collective and Oggifinogi started working together on delivering targeted in-banner and in-stream video ads.

At the start of the companies’ relationship, Collective had taken a minority stake in the Bellevue, Washington-based company, whose name is an Italian idiom meaning “getting it done today.”

OggiFinogi raised a $2 million round last August as part of the company’s planned national expansion. In an interview with paidContent, Joe Apprendi, Collective’s CEO, said the company’s brand name will remain in place and OggiFinogi’s CEO Michael Hyman will continue in his role.

Collective has been expanding its targeted branding campaign abilities to video for a while. The reason for buying the company, as opposed to simply continuing to use it as a partner, reflects the need to offer advertisers an all-in-one turnkey solution of targeted advertising and rich media within its AMP media management platform.

“For me, in building a platform for brand advertisers, I know that however sophisticated the data you have is, you have a dynamic creative execution to deliver much more than clicks and conversions,” Apprendi said. “At the end of the day, you’re not just competing for online ad budgets, but you have to figure out how to capture TV ad spend. Having OggiFinogi part of Collective helps us do that on a higher level.”

The purchase also potentially sets Collective up to take advantage of the wider ad industry goal of TV set-top box ad targeting. So far, that area is still fairly nascent, but both the technology and advertiser interest in addressable TV has become more of a reality lately. In the short term, Collective also expects to move more into mobile advertising, an area that has also seen a great deal of growth coming from rich media.

The deal also reflects the continued surge in online video ad spending. Over the next five years, online video ad dollars is expected rise 19.6 percent annually, according to Magna Global latest forecast. eMarketer has estimated that U.S. online video ad spend will rise 48.1 percent in 2010, to $1.5 billion. Also, WPP’s Kantar Video projects that spending in that space, including mobile and online, could reach $10 billion on a global level in just five years.

Those numbers have helped fuel a number of high profile acquisitions and fundings in the online video space in recent months, including Tremor Media’s purchase of streaming ad placement service ScanScout. and Undertone’s acquisition of online video ad network Jambo Media. That was preceded by online ad firm Specific Media’s purchase video ad network BBE. In the meantime, online video ad services companies SpotXchange, YuMe, TidalTV, BrightRoll have all raised substantial amounts of funding.

One of the big issues facing companies is the measurement standard being used for online video. Collective is relying on comScore’s panel-based Internet Gross Rating Point (iGRP) reporting mechanism for all Collective video, rich media and display campaigns. The company cites a Break Media report that said that the majority of advertisers believe that online advertising should be measured using GRPs, and 47 percent would spend more with online video if it were available.

But WPP’s Kantar Video has disagreed with the idea of GRPs for for video, saying that online video can’t be measured in the same way as TV, though advertisers certainly would appreciate a familiar metric on which to base their spending on.

In any case, Collective also noted that despite the sunny forecasts for online video spending, brand advertisers have not yet tapped video’s promise. Apprendi says that more than 70 percent of Collective’s business is generated by brand advertisers looking to shift spend from TV budgets. “It’s about offering the right combination of targeting ability and the ability to have compelling creative as part of the mix,” he said. “That’s the bottom line.”

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