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The Race for Online Video
By: Dwayne W. Waite Jr.
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As the advertising world watches the Publicis-Omnicom merger, other races are beginning to pick up. Yes, like we said earlier and as Sir Martin Sorrell stated when the news broke out about the major deal, "further consolidation is inevitable."

How true.

Sorrell is living up to his words. Several of WPP's subsidiaries have recently announced several acquisitions in the digital and "demand generation" realm in Hong Kong and Singapore. Its data arm, Kantar, also recently bought a stake in SecondSync, a social media conversation-monitoring tool.

But the more interesting race is the reach for online video. Three major announcements have come in shortly after the major merger news. First, Pixability, an ad agency that focuses on online marketing and YouTube, published a report about how the top 100 brands are using the medium. The numbers are staggering. The report states that these 100 brands collectively account for 9.5 billion YouTube views, 2,200 channels, and 258,000 videos.

Wow.

Based on those findings, the other two announcements make sense.

The second announcement is that AOL is buying video ad exchange site Adap.tv for $405 million in cash and stock. AOL has quietly been building a more relevant digital media house, so this is a very interesting move for the company.

The third announcement came the same day, with video advertising company YuMe making its trading debut on the NYSE. It has already raised $46 million and has an early valuation of $309 million. YuMe has even more cash behind it, being backed by VC firms Khosla Ventures and Accel Partners. Khosla's portfolio includes Indiegogo (crowdfunding) and Storify, while Accel Partners' portfolio boasts Spotify, Facebook, 99 Designs, Etsy, Kayak, and Dropbox.

The online video advertising space is certainly heating up, along with the acts of consolidation the big entities are performing. In a space where "best practices" are still being formulated, this is a most exciting time to be in advertising.

Will we see further consolidation? Without a doubt, and we would suspect that online video companies would be in high demand. But we also see significant niches in markets where indie online video advertising shops can flourish. Like Fitty Ads in the fitness industry, which can place both regular online ads and video. Or, for those companies that can prepare online video through email marketing, that space is still being built out.

There is much more coming, and we're looking forward to seeing a tighter race.


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About the Author
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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