Vungle unveils the first exchange just for in-app video ads

Mobile video ad startup Vungle launched today a private beta of the first, built-from-the-ground-up exchange exclusively for in-app video ads.

The company’s forte is the 15-second video ad that runs in apps on iOS and Android devices, and it reports more than 100 million people watch its ads every month.

In-app video ads can be used as interstitials, such as offering another round of play if the user watches an ad. They can also work as trailers to promote app installs, playing in other apps.

“Vungle Exchange offers the ability to buy high-quality in-app video inventory programmatically for the first time,” vp of marketing Andrea Sharfin told VentureBeat. To get there, she said, the company had to solve five big tech problems:

• Ad quality is addressed by serving only high-res, high-bitrate 15-second ads. The company says its research shows 15 second ads get the most engagement.
• Any distributed asset has to deal with latency, and video in particular has to. The Exchange is promising the lowest latency around, serving up a video ad “in less time than it takes the human eye to blink.”
• Both brands and developers are wary of mucking up their property by a mismatch between the video ad and the app. Advanced controls in the Exchange are intended to offer some reassurances about brand safety.
• The Exchange uses server-side tech to handle new technical and creative formats, with the intention of avoiding client-side issues. IAB’s Video Ad Serving Template, or VAST, will be the first standard offered.
• Custom algorithms are used for optimization.

Sharfin added that the Exchange is being rolled out over the next few months. Fifty app publishers are currently participating in the closed beta, including ZeptoLab (“Cut the Rope”), Halfbrick (“Fruit Ninja”), noodlecake, Limbic, and “a variety of industry-leading DSPs [demand-side platforms] and ATDs [Agency Trading Desks].”

A survey released last week by VentureBeat showed that game developers were often choosing startup ad companies like Vungle to make money from their mobile games as opposed to, say, Google. Interstitial ads were found to be the most-used monetization method, although the in-app freemium purchase is the biggest money maker. Video ad platforms like Vungle’s and AdColony’s were used by the most successful game developers.

In February, Vungle raised $17 million in a series B round of funding, bringing its total raised so far to $25.5 million. The investment group included Google Ventures and AOL Ventures.