U.K. advertising behemoth invests in video ad company.

WPP Takes Stake in VideoEgg

U.K. advertising behemoth invests in video ad company.
April 13, 2007

By Leah Messinger

 

Global advertising and marketing giant WPP said Monday it had invested $3.5 million for an undisclosed stake in VideoEgg, the online video platform and advertising network company.

 

VideoEgg, which provides video services and technology to incorporate advertising within videos, claims it is used by approximately 60 social networking sites, such as Bebo and Dogster. And that’s one reason WPP says it’s interested.

 

“Our clients want to understand how to use online communities to build brands and communicate with consumers, particularly younger consumers, who are spending time in these communities,” said WPP Digital CEO Mark Read in a press release.

 

According to London-based WPP, VideoEgg is an attractive investment option since it combines video, social networking, and user-generated content, three rapidly growing areas of digital media.

 

“This deal really seems to be at the intersection of two important topics in the space of social media and video,” said associate analyst Meggan Friedman at William Blair & Company. She added that investment makes sense considering the incredible amount of inventory available to advertisers on video sites.

 

Ms. Friedman said the investment also seemed in line with the culture of WPP. “I think about them as being pretty forward-thinking in terms of media investments, and I think they make a lot more of these investments [than their competitors],” she said.

 

In addition to VideoEgg, WPP has also recently put money into LiveWorld and Visible Technologies. The former offers social networking platforms, the latter on online branding.

 

WPP works with many Fortune Global 500 companies and employs nearly 100,000 people in 106 countries. San Francisco-based VideoEgg, which was formed in 2005, employs 53 people. Other VideoEgg investors include Maveron, August Capital, and First Round Capital.