Video Ad Network Shifts Focus, Raises Money

A little over a year ago, then London-based LiveRail launched its video ad network in beta. LiveRail offered video hosting to publishers and sold what it called “click-to-play” ads, which were text based ads that loaded below the Flash-based video player and played a video advertisement on click. Now, having relocated to San Francisco and raised just under a million dollars, the site is changing its direction.

LiveRail is nixing the ad network and focusing instead on selling its ad serving technology, which is a platform that can “manage, target, display and track advertising” for web video. The ad server can support a range of video ad formats, including overlay, ticker, and pre-, mid-, and post-roll ads. It’s built on top of LiveRail’s original flash-based video player, which means publishers can plug and play by using the included player.

The company also announced a new product this week called Junction. Junction is a free tool that helps video publishers manage their ad relationships on external networks. LiveRail said that it hopes that Junction will become the industry standard for publishers that work with multiple video ad networks. CEO Mark Trefgarne told the blog NewTeeVee that the free product will be used as a marketing tool to draw in potential customers for their paid ad serving software as well.

Transitioning from ad network to software provider is probably a smart move. Video ad networks is a rather saturated segment of the advertising playing field right now, with numerous startups competing against larger networks for publishers. And with so many of the available ad dollars likely going to the dominant top 5 publishers, it makes sense to sell software to publishers and ad networks to manage ad serving rather than attempt to compete as an ad network. Selling good video ad serving and management software is a much more untapped market for LiveRail to go after.

Video ad spending is expected to reach $3.4 billion by 2011, which is good news for anyone in this space.

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