IRVINE, Calif., Aug. 26, 2014 (GLOBE NEWSWIRE) -- According to the Interactive Advertising Bureau, American adults watch an average of 23 minutes of online video per day – a 23% increase from 2010.
Advertisers are following and engaging these eyeballs. Approximately 29 billion video ads (11,000/second) are viewed online every month.
YouTube dominates this landscape, but a vast ecosystem of independent publishers are now offering premium content through alternative channels, offering increased flexibility, partnerships and brand protection.
Adaptive Medias Inc. (OTCQB:ADTM) is an upstart innovator in this space with quarterly revenue growth of 3,900%.
"We are a digital content monetization, syndication and management platform," stated Adaptive Medias' CEO, Qayed Shareef, in an exclusive interview with Financial Press. "We are an alternative to YouTube with scale and targeting all within a brand safe environment. Our providers do not want their companies to be displayed next to pornography or violence. We work with clients like WSJ, Cars.com and many other content developers who need a 'brand safe' technology platform to maximize the user experience and advertising opportunities."
A year ago, Adaptive Medias did $15,000 in revenue for Q2 2013. Q2, 2014 the company did $1.1 million in revenue. Revenue grew 62% from the previous quarter and almost 4000% from the same period last year. Shareef anticipates doing $5-$7 million in 2014, the company's second full year of being in business.
On August 19, 2014, Adaptive Medias announced that it has extended its content syndication footprint to include publishing on Facebook.
"We've been working on the Facebook opportunity for 6 months, and they approved our press release regarding the integration of our platform," stated Shareef. "This is a very important milestone. Facebook is the largest platform on the planet for audiences consuming content on a daily basis. We believe that social networks like Facebook, and potentially Twitter, are the future of targeted messaging and content syndication."
Adaptive Medias' proprietary dashboard empowers premium content providers to share video content directly on their Facebook Pages. This allows people who use Facebook to discover premium video content where they most spend their time.
Brand safety is a concept that Shareef and Adaptive Medias take very seriously.
"The Wall Street Journal is a recognizable brand," explained Shareef. "And they are extremely protective of that brand. They want their content to be on a website that does not have hate speech, violence or pornographic materials."
"Often, with mature established companies, their biggest concern is 'where is my brand going to be? Who is consuming it? What environment is it in?' Adaptive Medias has answers to all of those questions."
The core of Adaptive Medias' business is the underlying technology. Its aspirational competitor in the marketplace is AOL, which has spent hundreds of millions of dollars building their technology stack. Over the last three years Adaptive Medias has spent approximately $16 million.
"YouTube is monetized through pre-roll ads and display advertising," stated Shareef. "It's a revenue share situation. The real numbers are never disclosed to the content developer. Various third party sources have commented that YouTube's share is significant. That may or may not be acceptable to the developer. But the bigger problem is loss of control. For the developer: what ads are running with my content? For the Advertiser: Where are my ads running? It's a bit of The Wild West - and not ideal for image conscious companies."
Shareef points out that if a partner publisher wants to embed your content on its site, a YouTube player leaves zero controls over the economics or distribution. A report that we found on a third party site (Allthingsd.com) suggested that YouTube's percentage can be as high as 45%.
"Facebook is an exciting opportunity for us, because they have better ways to engage their users through targeting," stated Shareef. "For example, if we have content focused on Auto Enthusiasts, it is very easy for us to find that audience though Facebook targeting capabilities."
Syndicating to more places provides an opportunity to make more content. By utilizing data and relationships from syndication, content producers can identify audience demand and monetization opportunities. There's also the chance that larger publishers (i.e., Amazon, Netflix, etc.) could purchase exclusive rights to the content.
"Let's say we have video content on hot-rods. We can target an audience of car enthusiasts and sell integrated advertising sponsorships – creating multiple revenue streams."
A study by digital marketing software and services company Searchmetrics found an interesting trend about the most tweeted (shared) news articles of 2013. The articles that had the most tweets were ones that were originally accompanied by relevant video content on the publication's page.
"User Generated Content (UGC) is my son playing with a water gun, or some guy using his iPhone to film a buddy skateboarding. Adaptive Medias is not interested in this domain. Our focus is on premium content which is typically one to three minute clips of studio-quality content that brand-conscious advertisers want to be associated with."
Shareef believes that content is still king. And there are opportunities for a company innovating outside the YouTube model. The space is already generating billions of dollars, and projected to be $18 billion by 2017.
Facebook's 2014 monthly video content views have increased by 500% compared to 2013. The amount of time viewers spend watching videos on Facebook has increased 300%.
Adaptive Medias is currently trading at $2.30 with a market cap of $26.7 million.
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Adaptive Medias Inc. 16795 Von Karman Ave Suite 240 Irvine, CA 92606 Email: Ph: (949) 525-4634
