Vdopia raises $4M Series A for high-clickthrough App Store ads

Nexus Venture Partners has invested $4 million in Vdopia, a San Jose-based company that serves video ads to iPhone users while their apps are downloading from the App Store.

Vdopia has developed a way to serve these videos in a format called “pre-app” that is perfect for placing a brand-reinforcing ad that accompanies the app. It’s a lot like watching Hulu. Watch the demo video here to see how it looks on the iPhone. Vdopia can also serve “in-app” ads built directly into the app. What’s important is that the user isn’t sent off somewhere else. Everything appears to work within the app.

Vdopia believes mobile ads done right may beat TV ads. That’s a big claim, and Vdopia puts question marks and parentheses around it. But the comparative table they sent me — click the thumbnail at right to see it full-size — suggests that there are reasons advertisers are excited about mobile opportunities right now.

The chart at right shows how radical a difference the embedded pre-app approach is: Vdopia’s video ads for the iPhone register a 400 percent boost in clickthrough rates over internet in-stream ads. iVdopia, the platform’s name, works best with brand-reinforcing ads tied to the app being downloaded, which is why the clickthrough rates are much higher.

Vdopia claims its ad network already serves more than 100 million visitors every month. The company specifically focuses on brand-centric advertising. Its Brand Connect program offers multiple ad formats across multiple internet TV channels, and promises “brand-safe content” that won’t be embarrassing to the advertiser in question.

But wait there’s more! Vdopia also has a new CEO. Rohit Sharma is not the cricket player with the same name. He was EVP and CTO of optical switch maker ONI Systems, which Ciena bought in 2002.