Self-serve video ad provider Jivox announced a $10 million round today. We wrote about the company, which lets advertisers create short ads using stock video, a few months ago. It also distributes these ads through a publisher network, which has grown with today’s addition of WorldNow ExpoTV and AOL India. It claims $40 million viewers in this network.
Jivox finds itself in a growing subset of companies that are tapping the opportunity for SMB video advertising. There are lots of reasons this market is growing, including lowered barriers and an increased interest and availability for SMBs to advertise with video. Providers like Jivox are fueling this, so they’re essentially both driving and being driven by the market opportunity. All this is explored in a report we’ll release later this week.
Jivox is slightly different from some of the other players in this space in that it doesn’t seem to have Internet Yellow Pages as a target for both sales and distribution channels. Most of the SMB video opportunity will involve video that accompanies business profiles on IYPs or city guides, and is sold by those organizations.
Jivox on the other hand is self service and the videos are distributed throughout what is essentially an ad network it is building. This is similar to what Google has done with video for AdSense — AdSense publishers can choose to have video ads hosted on their sites in the same way they’ve traditionally done with text ads.
The downside to this strategy, however, is it doesn’t take advantage of local video’s true value to users. When served in an IYP environment, it adds context and color to business profiles and makes buying decisions easier. When distributed throughout an ad network, the videos might be contextually relevant, but they aren’t served at the point where someone has done a specific local search for a certain type of business (a la IYP).
With the self-service model, the company could also face the same challenge as paid search — the addressable market of advertisers that self provision is only so big. This is another advantage of video vendors that work with IYPs — they can grow on the backs of the all-important local sales channel. On the other hand, Jivox has advantages in working with larger advertisers and its model isn’t confined to local.
IYPs are stepping up their video sales efforts, meaning there will be lots of business for video producers. In the conversations I’ve had with them, they also wish to work with multiple vendors to provide choice and also to have creative diversity, so all videos don’t end up looking the same.
With the video assets Jivox has built, we could see it begin to work with IYPs in addition to the ad network approach. Keep a close eye on this space. It will be big.