Aerserv, a mobile video mediation platform, emerged from stealth Monday after a year in the garage with big plans to empower publishers looking to optimize their reach in the nascent video mobile ad space.
Aerserv chief executive Josh Speyer did his best to differentiate his startup from traditional mobile video ad exchanges, of which there are a few, and mobile ad exchanges themselves, of which there are many.
“With a traditional exchange, you’re just raising your hand saying, ‘I have something to sell, and there’s a bunch of people on the other side saying, ‘I have stuff to buy,'” Speyer told VentureBeat. “That would be more like the New York Stock Exchange. We’re more like eTrade, where you have your cash, and you get to allocate it across all the things you want to do with it.”
“Mediation just means that we allow publishers to take how they sell, who they sell to, and what the ad formats are, and govern the risk and reward of additional monetization. Mediation lets you control how you sell your ad inventory,” Speyer added.
Need help monetizing your app?
Learn what successful game developers do differently.
Aerserv is emerging at a good time. U.S. ad firms will spend about $1.5 billion on mobile video ads by the end of 2014, up from $722 million spent last year. The ads accounted for nearly 19 percent of all digital video ad spending last year, a number that will climb to nearly 26 percent by the end 2014, according to eMarketer analyst David Hallerman.
Speyer was even more optimistic, saying the space will be worth $40 billion in five years.
What’s unusual here is Aerserv is also guaranteeing a $6 CPM for mobile interstitial impressions to publishers who integrate with their platform by Oct. 31. Speyer and his COO Andrew Gerhart are certain their proprietary optimization tools, along with the startup’s alignment with numerous independent app developers, will bring publishers to a position of strength where now they’re perceived as just another cog in a much larger network.
“We put the control in the publisher’s hand. If you were just to work with a network, they could show anything in your app, and you wouldn’t have a lot of control over it,” Speyer said.
Aerserv has its work cut out for it in the competitive mobile ad space — take Google’s DoubleClick, Twitter-owned MoPub, and Opera Mediaworks, for instance. Speyer said DoubleClick is not so focused on mobile video ads as he is, while Twitter paid a reported $350 million for MoPub, which Speyer says is closer to Aerserv. Opera Mediaworks did about $120 million in revenue last year.
Aerserv is based in Newport Beach, Calif. and has 25 employees. The company bootstrapped $2 million from employee pockets in order to launch. While not having to feed at the trough of venture capitalists can be a good thing, this may change as Aerserv gains traction and needs outside funding to grow.
Gerhart told VentureBeat that as far as he and his team are concerned, mobile video ads are the next big frontier in the thriving mobile advertising ecosystem.
“Mobile video has higher click-through rates and higher engagement rates — way above static interstitials. And the publishers want it because they have really high CPMs. So I think, yeah, over time, mobile video will overtake all the other units” in the space, Gerhart said.