AOL, Google Join $17 Million Bet on Mobile Video Ads with Vungle

By Steve Anderson February 10, 2014

Video advertising is an increasing part of our lives as Internet users. While some may begrudge this use of bandwidth to enrich others—particularly those users who come under bandwidth caps—there's little denying that these new ads help run the Internet as we know it. Recent news of new investment into the mobile video advertising startup known as Vungle, meanwhile, are showing that this new technology isn't going away any time soon, but rather just getting started.

The reports direct from Vungle note that the company landed $17 million in a Series B funding effort, and featured both Google Ventures and AOL Ventures as stakeholders in a round led by Thomvest Ventures, joined in by several other investors as well. That's quite a bit of cash going in, and given what Vungle does, it may well prove a good investment in the long run.

Vungle has a series of tools for app developers by which said developers can add mobile video advertising to released apps, which in turn gives Vungle a platform from which to exhibit said ads. It's already a pretty robust platform; Vungle ads are viewed by, on average, 100 million people every month. That's valuable by any stretch, but it only gets better thanks to recent moves at Vungle to create a mobile ad exchange system to more easily allow advertisers to purchase ads on a real-time bidding system. The investment will allow Vungle, at last report, to bring in around 100 extra employees to augment its capability to deliver advertising in apps.

There is, of course, a measure of competition in this market. For instance, Tremor Video deals in mobile apps in its video ad exchange, and InMobi's exchange offers in-app video listings. But Vungle means to make its competitive prospect in an exclusive focus on in-app mobile video, allowing it to not only better understand the market that it serves with that exclusiveness, but also make the best presentation to potential advertisers with that understanding.

Andrea Sharfin, the vice-president of marketing for Vungle, laid out many of the challenges that such understanding will hopefully help surmount. Among these challenges include things like device fragmentation—just look at the sheer number of devices running Android in the field—as well as connection speed, as noted previously. How can one serve up video-based advertising in a fashion that doesn't hamper performance or shatter a user's bandwidth limits? After all, there's no surer way to endear a customer to not buying a product or service than the discovery that the advertisement for same pushed the user over a bandwidth cap for the month.

But by like token, the possibilities associated with in-app mobile video advertising are too lush to pass up. Given the increase in mobile devices—not to mention the growth of machine to machine communications known collectively as the “Internet of Things”--the number of users is on the rise as well. Advertisers inevitably go where the people are; this is simply the point of advertising in the first place, to reach potential customers of goods and services. App developers, meanwhile, are eager for a means that allows same to continue programming apps yet do things like eat and live indoors, and advertising can be quite a help on that front.

Vungle may well ultimately prove a good thing for the app system as we know it, and with Google and AOL involved in the fray, could give us many more new apps—and many more new video ads—to go along with it.

Edited by Cassandra Tucker

Contributing TechZone360 Writer

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