Vungle takes its in-app video trailer service out of beta with a $1M developer fund

Vungle is looking to kickstart the growth of its new in-app video trailer advertising service with a new $1 million fund to attract developers to the platform with guaranteed payouts.

The mobile advertising startup is using half of the $2 million in seed funding it received last month from Google Ventures, Maynard Webb, Crosslink Capital and others for the new developer fund. In addition, the company also announced today it has made its publisher SDK self-serve, in order boost the amount of inventory in its system and meet what it calls “overwhelming advertiser demand.”

Vungle’s service allows developers to promote their apps via short 15 second trailers that are shown as video ads inside other apps.

“We feel that existing mobile advertising options, such as banner advertisements, represent the 2nd generation of mobile advertising, with SMS being the 1st,” says Vungle co-founder Jack Smith. “With Vungle, we see 15 second video trailers as the next generation of mobile advertising and hope that it will be come the de-facto way to monetize mobile apps in the near future”.

Although Vungle is betting boldly on the prospects of its unique new cross-promotion service, over the past year it has become increasing clear that interstitial video ads perform much better than traditional banner ads, generating higher conversion and click-through rates. Mopub, Tapjoy and Flurry all launched video advertising products last year, and in January SponsorPay reported its revenues had grown by 125 percent year-on-year, largely on the strength of its video advertising product BrandEngage.

Vungle will use its new developer fund to ensure early payouts for developers that meet target objectives like showing a certain number of videos. As an act of good faith the company is also offering to provide selected publishers with what it calls a “100 percent fill rate” guarantee; an agreement that will ensure a developer will earn money from the service, even if they are unable to show Vungle’s trailers due to a lack of advertiser inventory.