Yesterday we have covered BlackArrow, which offers an advertising management platform for video, allowing web sites to monitor their inventory while enabling advertisers to insert ads on-the-fly. They have taken $12M and are somehow relying on the cable companies to do its business. The company wants to insert targeted ads into on-demand viewing by placing a piece of hardware between cable operators and consumers While we were researching on BlackArrow online we came across YuMe Networks and realized it is worth writing about.
The well-funded YuMe Networks is aiming to match video publishers with video advertising using a bit of contextual analysis. The company said video content is targeted based on tags and metadata, something that generally works much better for established content creators who label their work well. YuMe uses such information to slot videos into ad-friendly content buckets such as auto, finance, and entertainment.
It’s not quite a highly automated process though, as ad placements are based on broad 
categories and in fact YuMe employs actual humans to screen content and group it into such categories. That’s in contrast to companies such as TVEyes’ Podscope and Nexidia, which are applying speech recognition tools to decipher what’s going on in a video and place an ad next to it.
The company is based in Redwood City, Calif and has taken more than $7 million in its first round of funding from Khosla Ventures, Accel Partners, and BV Capital. With the current funding their total financing is already $16 million and makes them a well funded contender in the realm of video advertising. The new participant here is DAG Ventures. VideoEgg, by contrast, is one of the largest players in terms of funding having attracted over $34 million over four rounds.
The ads are also included with the video as it’s syndicated on other sites. All distribution is monitored through their analytics package, which also allows geographical targeting down to the zip code. YuMe currently supports video on the web, downloads, mobile and IPTV. Some of their clients include HouseValues.com, True.com, Southwest Media Group, MSN Video, BitTorrent, Azureus, and Pando.
YuMe is building out its own ad inventory, though much of it consists of repurposing 30-second television slots, pretty much like SpotRunner’s ads, into shorter bits appropriate for the web.
YuMe has won “Best In Show Judges Choice†at the Under The Radar Entertainment and Media Conference in 2007.
The market
Video advertising is promising to be huge opportunity online and the sector is extremely competitive with new players entering every couple of weeks. Venture capitals also do think the online video advertising holds the chances to be the next big thing on Internet to bring billions of revenues in and are pouring big money into start-ups with the hope they come up to the groundbreaking technology that might shake the sector and make them the huge ROI.  Â
No matter what standard for video ads the sector might adopt – pre-roll ads, mid-roll ads, post-roll ads, watermark ads, viral ads or overlay ads, the undisputed leader remains Google’s YouTube with its huge number of eyeballs. That’s why the smaller players are focusing not on the reach but on different approaches and technologies to more effectively serve, track and measure these video ads. The video ads are in their infancy on Web and there is plenty of room for innovation and growth and all those small start-up companies hold their good chances for success.
Some companies, as we know them, include BlackArrow, BrightRoll, XillianTV, Podaddies, VMIX and MeeVee. BrightRoll video ad network itself has raises $5 Million while VMIX, yet another video network company has also raised a whopping amount of money $16.5M to expand its business. Other video advertising players include Revver, VideoEgg’s TheEggNetwork, ScanScout, Adap.tv, AdBrite’s InVideo platform, BroadRamp and Blinkx.
eMarketer predicts online video advertising to nearly double in 2008 to $1.3 billion, but no one’s really nailed a scalable ad platform for video. However, Google’s been quietly testing their own system and there are a bunch of other startups tackling it as well.
More about YuMe Networks
YuMe is the first dedicated broadband video advertising network built from the ground up that offers a brand safe advertising experience that can be delivered to any device – PC, TV, mobile and more – whether streamed or downloaded.
YuMe co–founders Jayant Kadambi and Ayyappan Sankaran realized early on that a strong broadband and IP–based video ad monetization infrastructure did not exist. Whereas today’s video advertising solutions are incremental modifications of existing text and banner networks, Ayyappan and Jayant recognized that video is fundamentally different and in order to properly monetize, transport, traffic and reliably report against video, a new type of advertising network was necessary.
Web advertising has evolved from text, to display and now to video. YuMe is the only ad network built exclusively for the new web video world, providing advertisers and publishers the unprecedented ability to identify, classify and track content to ensure brand safety, contextual relevance, controlled syndication and consistent delivery across all digital media platforms – web, downloads, mobile and IPTV.
YuMe provides publishers the unique ability to identify, classify and track content to ensure brand safety, contextual brand relevance, controlled syndication and consistent delivery to any device – PC, TV, Mobile – whether streamed or downloaded.
YuMe brings order to what is currently chaos in online video. Our solution enables publishers to instantly organize all the video on their site into content channels – automotive, financial services, entertainment, family friendly and more – unlocking new inventory for monetization and allowing advertisers to more precisely target their message to content.
Publisher Benefits?
Enable advertisers to precision target their video ads within your content, increasing the value of your inventory and CPMs. You can now offer more than just run–of–site campaigns.
Syndicate video assets with confidence. YuMe’s proprietary tracking technology allows you to track, monitor and control the distribution and monetization of your video
Deliver richer experiences to customers and communities by tying brand messaging to positioning. No more brands associated with content that is inappropriate or not contextually relevant to the advertiser.
Strike the right balance of advertising and content. YuMe separates the serving of content from the serving of ads, allowing you to determine the best mix of ad types across your channels of content.
YuMe delivers a brand safe, monitored and measured experience across all digital media platforms – Web, Downloads, Mobile and IPTV.
Management Team
Jayant Kadambi, Co–founder and CEO
Jayant Kadambi has over 18 years of experience in the areas of networking, hardware architecture and semiconductors. Prior to co-founding YuMe in 2004, Jayant was Vice President R&D and Officer of Netopia, Inc., a publicly held manufacturer of DSL equipment and service provider for ISP’s and carriers. Jayant joined Netopia upon its acquisition in 1999 of StarNet Technologies, a VoDSL company he had co-founded. Prior to co-founding StarNet, Jayant held various technical and marketing positions in AMD’s networks division, and AT&T Bell Labs, where he worked on high-speed LAN systems, hardware and DSL technologies. Jayant received his BSEE and Masters in Electrical Engineering from Rensselaer Polytechnic. Jayant is the co-author of a book on Gigabit Ethernet and the holder of several patents in the networking arena.
Ayyappan Sankaran, Co–founder and CTO
Ayyappan Sankaran has over 18 years of experience in software architecture, design and development in the areas of real time embedded systems, voice and data networks and medical instrumentation. Prior to co-founding YuMe in 2004, Ayyappan was Director of software development at Netopia, Inc., a publicly held manufacturer of DSL equipment and service provider for ISP’s and carriers. Ayyappan was a co-founder of StarNet Technologies, a VoDSL company that was acquired by Netopia in 1999. Prior to co-founding StarNet, Mr. Sankaran held various technical positions in Octel communications (acquired by Lucent technologies), Abbott Labs, and Ready Systems. Ayyappan holds a BSEE from the College of Engineering, Madras, India and a Masters in Electrical Engineering from the University of Texas.
Grant Ries, Vice President of Business Development
Grant Ries has over 10 years of experience in business development, sales and product marketing. Prior to joining YuMe, Grant was VP of Business Development at Revenue Science. Grant was a member of Revenue Science since its inception and served in a variety of strategic roles, from sales and marketing and account management to business development. Grant holds both a Bachelor of Arts and Masters Degree from The University of Washington.
Steven Comfort, Vice President of Sales
The last 13 of Steven’s 18 years in advertising have been spent in the interactive sector. He has run sales teams at a string of successful young companies: Wired Digital, 24/7 Real Media, eGroups, Tickle and hi5. Prior to 1994, Steven worked in the media planning departments of MediaVest and Euro RSCG in New York City. Steven holds a BA from the University of North Carolina – Chapel Hill.
Bob Bahramipour, Vice President of Ad Operations
Bob has 15 years of experience at major media & internet companies, as well as start-ups. Most recently, as a senior member of the Yahoo! Search team, Bob managed the toolbar business and was responsible for overseeing product, distribution, and partnerships. Prior to Yahoo!, Bob served as the Director of Business Development at 3721 Technology Co Ltd., a Chinese search engine which was acquired by Yahoo in 2003. Bob was also a co-founder & VP of Business Development for Switchouse Inc, an online marketplace for consumers. Prior to Switchouse, Bob held of variety of positions in Volpe Brown Whelan & Company’s M&A advisory group, within SBC’s (now AT&T) corporate development team, and at Braxton Associates, a boutique strategy consulting firm. Bob received his BS from Georgetown University’s School of Foreign Service and attended Northwestern’s J.L. Kellogg Graduate School of Business.
Molly Glover Gallatin, Director of Marketing
Molly brings over 15 years of media and marketing management experience to the YuMe team. Molly began her work in interactive media in 1997 when she launched Granite Broadcasting’s Internet Division, overseeing operations and sales for ten network-affiliated TV station websites. Molly joins YuMe from Knight Ridder Digital, where she managed marketing and communications for the Real Cities Network. Prior to joining Knight Ridder Digital Molly worked for start-ups in the digital media management and Internet TV space – eMotion and RespondTV. Molly began her career in advertising, working in account management at BBDO and D’Arcy Masius Benton Bowles in New York. Molly received her BS from the University of Colorado at Boulder and her MBA from Columbia University.
Investors
Khosla Ventures offers venture assistance, strategic advice and capital to entrepreneurs. The firm helps entrepreneurs extend the potential of their ideas in both traditional venture areas like the Internet, computing, mobile, and silicon technology arenas but also supports breakthrough scientific work in clean technology areas such as bio–refineries for energy and bioplastics, solar, battery and other environmentally friendly technologies. Vinod Khosla was formerly a General Partner at Kleiner Perkins and founder of Sun Microsystems. Vinod has been labeled the #1 VC by Forbes and Fortune recently labeled him as one the nation’s most influential ethanol advocates, noting “there are venture capitalists, and there’s Vinod Khosla.” Vinod Khosla founded the firm in 2004 and was joined by partners David Weiden and Samir Kaul, as well as chief scientific officer Doug Cameron in 2006.
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Founded in 1983, Accel Partners is one of the world’s leading venture capital firms. The firm is dedicated to partnering with outstanding entrepreneurs to build world–class Internet, software and networking companies. Accel Partners has more than $4bn under management from its offices in Palo Alto, London, and China, and its portfolio companies have completed IPOs that have created well over $150 billion in market capitalization.
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BV Capital, headquartered in San Francisco, CA and Hamburg, Germany, is an early–stage venture capital firm. Established in 1997, BV focuses exclusively on the intersection of the consumer Internet, digital media and communication software sectors worldwide. BV’s team adds significant expertise and service to entrepreneurs who strive to turn ideas into long–term, sustainable growth companies. Investments include many successes such as Angieslist, del.icio.us, eGroups, Expertcity (gotomypc), K2 Networks and shopping.com. The firm backed by several high profile US, Asian and European investors has been named “one of the most influential investors on either side of the Atlantic” by the Wall Street Journal. To learn more about BV Capital, please visit www.bvcapital.com.
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DAG Ventures is a venture capital partnership investing in and helping outstanding entrepreneurs create leading, long-term companies across a range of markets. With roots from the 1980’s in cable TV, infrastructure, media, and wireless industries, the partnership today is privileged to work with world-class entrepreneurs as they build tomorrow’s leaders in the information technology, energy, and life science sectors.
More
http://yumenetworks.com/
http://www.techcrunch.com/2007/10/16/yume-closes-9-million-series-b/
http://www.crunchbase.com/company/yume
http://www.techcrunch.com/2007/07/06/video-ads-somebody-needs-to-solve-this-problem/
http://www.undertheradarblog.com/wp_blog.html?fb_2042860_anch=2648520
http://newteevee.com/2007/03/05/yume-launches-video-ad-network/
http://www.emarketer.com/Article.aspx?id=1004258
http://www.techcrunch.com/2007/05/11/youtube-video-advertising-no-pre-roll-no-context/
https://web2innovations.com/money/2008/02/09/blackarrow-took-12-million-to-tackle-the-video-advertising-relies-on-cable-companies/
http://venturebeat.com/2007/10/14/blackarrow-ad-management-for-modern-tv-unstealths-with-12m-financing/
http://adsense.blogspot.com/2006/05/introducing-video-ads.html
http://adwords.blogspot.com/2006/05/click-to-play-video-ads-for-adwords.html
http://adsense.blogspot.com/2007/05/adsense-coming-to-video-near-you.html
http://www.nytimes.com/2007/08/22/technology/22google.html
http://mashable.com/2007/08/21/youtube-reinvents-video-ads/
http://mashable.com/2007/05/11/youtube-ads-2/
http://www.forbes.com/2007/02/22/video-ads-youtube-tech-media-cx_lh_0223video.html
http://venturebeat.com/2006/11/08/skipping-the-ads-black-arrow-raises-1475m-to-defy-you/
http://www.khoslaventures.com/
http://www.accel.com/
http://www.bvcapital.com/
marketing IP communications to consumer markets. As Vice-President with 