Digitalsmiths Gets $6M for Video Ads
Digitalsmiths, with $6 million in hand, is the latest company to enter the contextual video ad market. Just yesterday we had ribbed the video search engine blinkx for being relatively late to market. Well, now there's another new player on the scene …
Context & Ripple Effects
The contextual video ad race is filling out fast: one day after NewTeeVee ribbed blinkx for arriving late to ad-matching, Digitalsmiths lands $6 million to push its VideoSense product into the same market, per StartupSquad's report. The round is confirmed, and it makes Digitalsmiths another funded entrant betting that matching ads to video content automatically is where online video monetizes.
That two funded players surfaced in back-to-back days says something about the moment: publishers are uploading more video than they can sell against by hand, and investors are underwriting technology that closes that gap.
First-order effects
- Digitalsmiths now has the capital to build out VideoSense and pitch video publishers directly against blinkx, which just committed to the same contextual-matching approach.
- Video publishers get a second credible vendor for automated ad matching, giving them leverage in pricing and integration deals that did not exist earlier this month.
Second-order effects
- Competing entrants will be pushed to differentiate on match accuracy, content indexing scale, and revenue share rather than the concept itself, since 'contextual video ads' is no longer a novel pitch to publishers.
- If several vendors compete for the same publisher inventory, early exclusive distribution deals become the scarce asset, and both companies face pressure to lock up catalogs before the field widens further.
Third-order effects
- Continued venture funding into contextual video ad startups points toward a crowded segment that eventually shakes out around whichever players can index video at the largest scale — the structure that has defined every prior wave of ad-tech specialization.
- Automated ad-to-content matching also nudges video toward search-like economics, where the value sits with whoever controls the indexing and targeting layer rather than the content host.
The trend: Venture money is pouring into contextual video advertising as the online video boom forces publishers to automate what used to be hand-sold ad placement.