Google acquires video ad tech player mDialog to help drive video ad sales

Despite the phenomenal growth of online video, and specifically its adoption by the highly coveted Millennial demographic, online video ads remain a markedly small piece of the overall advertising pie.

Google today took a step in the direction it hopes will change that, buying video ad tech startup mDialog, which assists big media companies to deliver, measure and monetize their streamed video content. Terms of the deal weren’t made public.

In a Google+ post, the company wrote:

“While nothing’s changing for their customers immediately, over time we’ll work with the mDialog team to incorporate their technology and expertise into our DoubleClick product suite. This represents the latest of our ongoing investments in helping brands connect with high-quality video content, like Google Partner Select, our new marketplace for premium programmatic video.”

mDialog’s technology — which allows it to deliver videos to a number of devices, including iPad, iPhone, Android, GoogleTV, Apple TV, Roku, and Xbox — will be integrated into the DoubleClick digital advertising business.

mDialog has raised about $8 million since it was founded in 2006 by Gregg Philpott.

Online advertising, according to recent eMarketer research, made up about one quarter of total ad revenue in 2013, about $42.6 billion. The video piece of that — about 9.7% — was worth about $4.15 billion in 2013. But it’s growing at nearly 44% per year and is expected to reach 15% of the digital ad pie by 2017.

Video ads also carry command CPM 5X to 10X higher than more static ads, like banner.

The quantity of video ads viewed has soared http://www.ooyala.com/videomind/blog/while-online-video-shows-strong-growth-video-ads-grow-stunning-rate in the past 12 month, comScore reported. The number of views reached more than 24.6 billion views, up 148% from the previous year. Google sites served up an average 2.9 billion video ads a month in 2013, reaching nearly 54% of the online population. 

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn