Videos are the great white hope of the adtech industry and AnyClip has capitalized on the craze
Way back in 2006, Jerusalem Venture Partners founder Erel Margalit was sitting at a bar in New York City with former CEO of Sony America, Michael Schulhof. Margalit was trying to get the entertainment executive to invest in Israeli startups, but Schulhof did not see Israel as an epicenter of entertainment-related innovation.
Finally, the story goes, Margalit suggested that they each write down on a napkin the kind of startup they would like to invest in. Startlingly, they had the same idea. That’s how, in 2008, AnyClip was born, with Margalit and Schulhof among its founders.
“The idea was to re-engage users with archives,” explains Oren Nauman, the company’s CEO, to Geektime. AnyClip started life as a YouTube for copyrighted movie clips licensed from the big studios.
“The idea was to let them re-engage with the old content.”
Now, AnyClip has announced it has completed a funding round of $21 million. Leading participants included new investors Ervington Investments, representing the interests of Russian businessman Roman Abramovich, and Limelight Networks (LLNW), a global leader in digital content delivery. Current shareholders Jerusalem Venture Partners, GTI, and other investors also participated in this expansion round.
Apparently, in the winner-take-all world of consumer startups, there wasn’t room for more than one YouTube. That’s why, several years ago, AnyClip decided to pivot from a searchable database of videos to an adtech company that distributes videos, serving ads before, after and during those videos.
“We looked at what works and what doesn’t work, and we changed into an ad network that reaches all kinds of audiences around the world. We collect data about consumption and engagement.”
This is how it works
Let’s say you visit a cooking website where you are studying a recipe for chocolate chip cookies. AnyClip will analyze the website, the context, and whatever it happens to know about you personally to stream a video clip that you are likely to enjoy. Since the subject is cookery, it might stream a clip from the Julia Child biopic Julie and Julia. The video itself is usually not the ad. Rather, the ad exists as a preroll or postroll in the video clip.
However, says Nauman, there are certain brands like Red Bull, BMW and Marriott, that have morphed into content creators in recent years. Their “premium content,” because it is so high quality, might find its way into an AnyClip streaming video, along with pivotal scenes from TV shows and popular motion pictures.
Numbers don’t lie
You may have never heard of AnyClip, but according to Nauman, the company distributes its content on over 200,000 sites around the world.
“We stream 4-5 billion videos every month: That’s 2 percent of the world’s video market. We have over 80 million uniques around the world.”
In fact, AnyClip is one of traffic measurement site ComScore’s top video platforms, after Google, Facebook and AOL and ahead of sites like Vimeo.
How do they do it?
Well, it helps to have a Sony movie exec as a founder. But beyond that, says Nauman, AnyClip solves two of adtech’s biggest pain points.
The first is what he euphemistically describes as “non-human traffic,” which is when machines or robots click or “watch” ads, costing advertisers more than a third of their budgets. AnyClip ferrets out these non-human users by detecting anomalous video-watching patterns.
“Under 5 percent of our videos are watched by non-human traffic. That’s one of the best rates in the industry. That’s why brands and studios trust us.”
An even thornier problem for the adtech industry is “engagement,” the fact that the rates advertisers will pay per impression goes down every year as the ROI per ad declines. Videos are touted as the next big thing in the adtech industry, and Nauman says that his platform is especially well targeted and effective at engaging users.
AnyClip’s revenues are in the tens of millions, claims Nauman, and the company has seen double digit growth over the past few years and is profitable.
It plans to use the money to expand to Europe and Asia as well as collect more detailed data about users and target them more precisely.
To understand why ever more precise targeting is the albatross of the adtech industry, click here.