Tomorrow Digitalsmiths, an entrant in the budding broadband video contextual advertising space, will announce a $6M Series A round from The Aurora Funds, Chrysalis Ventures and individual investors. I got a briefing from Digitalsmiths's CEO Ben Weinberger and CTO Matt Berry along with the new investors. The company's new Videosense product builds off of their existing automated video indexing and search product known as InScene which Hollywood studios have been using for years to index and search stock footage.

 

Videosense introduces a contextual ad matching process that matches ads to the content of videos based on an index of metadata that was extracted from the audio track and visual cues (scenery, characters, props, etc.). This matching and metadata gathering process is the company's secret sauce. As with all contextual approaches, the intention is to insert the appropriate ad at just the right moment. So say, for example, you're watching ‘24' online, when Jack Bauer pulls out his smartphone, a discreet ad for Treo pops up. The company can support all types of ads (video, text, banners, etc.) Digitalsmiths can do this across multiple video formats (Flash, WMV, Real, etc.) and plans to serve multiple devices as well.

 

While they haven't announced any customers yet, Weinberger said they're in multiple live customer trials and should be announcing something soon. There's been lots of energy and top tier VC funding in the contextual video ad serving space recently. Other companies that we're aware of in this space include ScanScout, YuMe, Adap.TV, and Gotuit (which has been more focused on indexing than ads), along with blinkx, which just announced its "AdHoc" product today.

 

Over the past year, vendors' efforts to improve upon today's vibrant, yet much maligned, pre-roll format have intensified. There are many different initiatives out there, such as new formats, interactivity, targeting, etc. Improvements in contextual targeting are part of this mix of innovation. All this activity isn't surprising as broadband video content providers have embraced advertising as their business model of choice.

 

Since pre-rolls are still the lifeblood of the broadband video industry and will be for a while, smart vendors will seek to build on its momentum, while gracefully introducing new formats. And since much of the pre-roll delivery infrastructure is now in place, it's also essential for the new crop of contextual vendors to integrate seamlessly with existing ad networks. Digitalsmiths seems to be adhering to this game plan, and so their development is worth keeping an eye on.