Jayant Kadambi: Making money in online video

According to Jayant Kadambi, prior to his company’s existence, content owners didn’t have a way to make money distributing video online. Kadambi, the 41-year-old co-founder and CEO of YuMe, set out to change that.

In 2004 Kadambi and Ayyappan Sankaran created YuMe, a Redwood City company that offers targeted marketing for online video content regardless of platform and device. Using video-sensor technology, YuMe categorizes online video content into auto, finance, entertainment, family or another general category. Advertisers choose a category that most closely relates to their product, then pay YuMe to advertise.

“You want to advertise the way you are used to advertising, by channel and by content,” Kadambi said.

Unlike a traditional advertising relationship that would terminate at this point, YuMe’s continues. Based on customers’ previous activity, the content they are viewing, and the information they gave to the Web site provider when they signed up, YuMe determines which advertising to display. If the customer is connected to the Internet, the ads are selected in real time; if the customer is not connected to the Internet, YuMe runs pre-loaded ads. When the customer next goes online, information about which ads were viewed versus fast-forwarded, which were viewed multiple times, and which were followed to Web sites is sent back to YuMe to further refine its targeting.

“In the online space, people are used to getting a lot more data, analytics and metrics,” Kadambi said.

YuMe has distribution partnerships with BitTorrent, Veoh, MediaZone, Azureus, Whyville.net, and somagirls.tv, and reaches 250 million viewers and 2 billion mobile phone users, according to the company. Kadambi believes that YuMe is the only company doing targeted and tracked online video advertising — though the sector is constantly changing. As the market develops over the next few years, he wants YuMe to be the biggest independent video ad platform and network.

Having forayed into the market of online video, YuMe’s next advertising project is live sporting events viewed online. Rather than use the same advertisements that are used on TV, YuMe hopes to insert advertising that is targeted to viewers’ geographic location as well as their virtual environment.

Kadambi earned an master’s degree in electrical engineering from Rensselaer Polytechnic Institute in 1986. YuMe has 19 employees in the U.S. and 20 in India.

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