Veoh to Bring Behavior to Video Ads

NEW YORK The behavioral targeting market has taken off for online display ads. Upstart Web video network Veoh sees the opportunity to do the same for video.

The San Diego-based company is rolling out a system that lets advertisers target ads to nine different audience segments, such as gaming fans, based on what videos people have watched, their searches and other behavior on the site. It will also build custom segments for advertisers.

The move is part of an effort to take the traditional TV model, based on aligning ad messages with content, and complementing it with one based on audience behavior. This will help better match advertisers with video content, said Mike Henry, svp of ad sales at Veoh.

“The demand is outstripping the supply,” he said. “The market for advertising in a video environment is nascent.”

Veoh could run into the same problem behavioral targeting pioneers Tacoda and Revenue Science did: The amount of inventory is not enough to create audience segments large enough. That dilemma led Tacoda and Revenue Science to become ad networks and run campaigns across many sites.

While Veoh boasts 28 million viewers worldwide, it draws a small audience in the U.S. In May, it attracted under 4 million viewers, less than one-sixth the audience of rival YouTube. What’s more, NBC Universal-News Corp. joint venture Hulu is gaining traction with its trove of TV shows and movies. About 2.4 million people visited it in May, its third month of operation.

While YouTube is the hands-down winner when it comes to user-generated content, Henry believes several other players will contend for the role of chief aggregator of high-quality content.

“I think the market for long-form content has yet to sort itself out,” he said.

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