Tap to watch a TV show clip on Lifetime's iPad app, and a high-definition video ad for the Home Depot begins playing, it seems, even before your finger has left the screen.
Shaving milliseconds to get that and thousands of other video ads loaded faster on mobile devices has earned a Brentwood [California] start-up millions. In a recently announced deal expected to close this fall, AdColony is being acquired by Opera Software of Norway for as much as $350 million. Opera, which offers a speedy Internet browser that's popular in developing countries, says the addition of AdColony will make its own online ad unit more appealing to advertisers.
As consumers spend more of their day staring at smartphones and tablets and fewer minutes in front of TV screens, advertisers want to shift with them. The ballooning market for ads in apps is expected to propel spending on mobile ads this year past the amount spent on radio and printed ads and ever closer to TV's sum, the research firm EMarketer said this month.
But moving video ads from TV to small screens has often produced shoddy results, marred by poor quality and frustrating buffering. AdColony says its computer code and infrastructure to broadcast high-definition, interactive ads has set it apart, keeping consumers, app makers and advertisers happy.
"Mobile is all about a snappy user experience," said Nikao Yang, an AdColony senior vice president. "If you're not delivering within three seconds, your user is gone."
The 100-person company, spread across seven cities, transmits ads for companies such as Nike Inc., Coca-Cola Co. and Toyota Motor Corp. to apps that include ABC News and Flixster and games from "Angry Birds"-maker Rovio and "Clash of Clans"-developer Supercell.
Ad-buying agency Horizon Media Inc., whose clients include Geico, Capital One and Jack in the Box, is booking business "in the millions" with AdColony at a rapid rate of growth.
Donald Williams, Horizon's chief digital officer, said AdColony's narrow focus on video quality and performance attracted clients. Being able to pay per engagement, rather than view, kept them hooked.
"It's a simple combination, but a rare combination of great performance technology meets a great advertising buying platform," Williams said.
In 2008, AdColony began as a competitor to many of the apps. As one of Apple's launch partners for the App Store, the company then known as Jirbo Inc. developed what became 14 of the top 200 apps on Apple's App Store by 2011. But as Jirbo sought to make money from its apps, sales agents realized video ads turned out grainy or would suddenly freeze. (continued...)
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Posted: 2014-07-17 @ 9:41am PT
I have watched enough video ads, I would probably be more likely to watch a whole ad if it video quality was better.