Start-Up Watch COD: Addroid replaces the video middleman with a middleSaaS

Posted by Jim Nichols on May 26th, 2011 at 12:01 am

Digital media is ridiculously complicated to buy and to develop creative for. Anything that makes that process simpler, faster, and cheaper is likely in a great place to get adopted and gain significant market traction.

Which is why Addroid is garnering more and more attention in our business. Addroid is a SaaS-based ad development environment and solution that makes it easy to make video ads to run in IAB banner sizes. Their goal is to replace expensive middleman technologies like the rich media providers with a drag and drop solution that creates an attractive add more or less immediately.

The cost structure of running video can be pricey. Serving a video ad is significantly more expensive than a Flash banner. According to Addroid, using one of the major rich media solutions companies (MediaMind, EyeWonder, PointRoll, and even DoubleClick) adds a cost of about 40 cents to the CPM versus a gif banner. Their platform takes that down to 15 cents.

Developed by an agency called Neoganda, Addroid is web-based, and provides an ad development environment where you quickly add creative elements and publish a video ad.

Here’s a video where their Founder explains the value proposition and shows the drop dead simple process of ad development:

http://www.vimeo.com/21728632

If you watched the video, you learned that going after the rich media company business is only part of their vision. They believe that brands and agencies would develop a lot more video ads instead of Flash banners if they could. By significantly reducing the video markup, they believe that they have created a pricing sweet spot to drive a dramatic transition in the industry.

Lemme tell me why I think they are on to something big. There are entire industries like entertainment and auto that would surely drop Flash but quick if video were more affordable. But many of the categories that would be most interested in making such a change are very value-oriented.

Oh, let’s call a spade a spade. These categories are filled with cheap sumbitches, though I don’t mean that as an insult. Let’s take entertainment as a for instance. When you have only a couple weeks and a limited budget to hype a film, you need to make every impression and every dollar count. So we shouldn’t be surprised that their buyers don’t throw money around willy nilly.

Which is why, I think, we still see Flash banners for some movies and TV programs, even though video would surely be more compelling.

A reduction from 40 cents to 15 cents represents a big drop in cost structure.

And there’s another cool thing. By replacing Flash banners with HTML video units, advertisers can better reach and persuade tablet users, 99 and 44/100s of whom are on iPads that don’t run Flash.

The name threw me a bit. I was expecting a mobile solution. But no matter, it is clearly designed to communicate the idea that they have replaced the middleman with a droid – or rather a SaaS.

So adding that up. Cheaper. HTML 5. Cheaper. Faster. And cheaper. I would imagine that more than a few of those reading this are already dialing.

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One Response to “Start-Up Watch COD: Addroid replaces the video middleman with a middleSaaS”

  1. Yes this industry is pretty much as you outlined it! Nice job on bringing out new insights. I think speed has a lot to do with it as well. Thanks!