YuMe Boasts Rapid Growth, Scores $25 Million Investment

Video ad network YuMe secured a $25 million funding round. It will use some of that money to develop technology to improve campaign operations for the big brand advertisers who make up most of its customers.

The investment follows a year of growth for the Redwood City, CA-based firm. Revenue in 2009 was approximately six times higher than the previous year, and YuMe trafficked campaigns from 110 advertisers represented by 80 ad agencies. The average insertion order was worth around $60,000, the company told ClickZ.

On the measurement side, YuMe wants to help online video emulate television. Last year it worked with media agency Mindshare to introduce an Internet gross rating point for online video.

President and co-founder Jayant Kadambi said such efforts will continue with the latest cash infusion.

“What we’ve done since then is we’ve added a bunch of software, technology, and algorithmic stuff to help people verify” audience demographics, he said.

The round was led by Menlo Ventures, which will take a seat on the company’s board.

Aside from YuMe, the field of established video ad networks includes Tremor Media, BBE, BrightRoll, and SpotXchange, all of which aggregate video ad inventory from broad-based consumer sites and niche properties. These companies typically offer a range of ad formats, including overlays and in-banner video, but their focus is on in-stream advertising.

By several accounts, the current field of video ad networks has found traction with major brand advertisers. “They are of growing importance,” said Chris Allen, director of video innovation at Starcom USA. “They make

more turnkey for us.”

“If you’re not taking advantage of…short-form content on video ad networks, you’re missing an opportunity,” he added.