Videoegg, a video ad network, raises $15 million

Videoegg, a video advertising network, has raised $15 million from Focus Ventures and returning investors.

The San Francisco company offers Web sites technology to help them publish videos, and ways to run advertising within those videos.

It has been in the news recently, and competes with several companies, including Fliqz, a relative newcomer, and several more established players, such as Brightcove. It’s a crucial time for it to grab market share, so the funding makes sense. Fliqz has raised less money, at $2.5 million, but is proving scrappy (see its easy toolbar, for example; scroll down). Brightcove raised $59 million earlier this year, and reportedly won a whopping value of $220 million.

When YouTube began inserting contextually relevant ads into its videos a couple of weeks ago, Videoegg claimed to have been doing the same thing since a year earlier, and pointed to the patents it’d already been granted for its service.

Earlier in August, Videoegg introduced its own Facebook advertising platform, which allows third-party applications on Facebook to insert Videoegg’s video ads and take a cut of revenue from it.

Facebook ads (screenshot below) are bringing in “north of $10” CPM in many cases, according to Troy Young, Videoegg’s chief marketing officer. The “ad market is broken” and the promise of online banner advertising is “unfulfilled,” with the effectiveness for banners undervalued by advertisers, Young told us. He says Videoegg is aiming to make banner advertising more relevant through more appealing video-based ads, and better targeting.

Previous investors (our coverage) include WPP, Maveron and August.