Video Traffic Driver Jun Group Raises Venture Funding To Promote Mobile Business

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Mitchell ReichgutVideo ad platform Jun Group has raised its second venture debt round of $2.5 million as the company turns its focus to its growing mobile ad-serving business.

When the New York-based company began offering mobile advertising services in 2009, mobile traffic constituted about 30% of its business. It roughly stayed at that level, rising to 35% in 2012. But last year is when things started to change, as 70% of Jun's traffic came from mobile.

"Mobile was mission-critical last year," said Mitchell Reichgut, founder and CEO of Jun, which has raised a total of $5 million in venture debt from backer Western Technology Investment since 2011. "The Web audience is dwindling far more than rapidly than most people realize. And a lot of that audience is switching to mobile apps. Brands are recognizing that. Most brands that work with us assume their campaigns will be completely multiscreen. In the past, a portion of the budget was allocated for mobile, the rest for PC. That's not the case any more."

In addition to mobile, the proceeds of the investment will go toward hiring across engineering, marketing and business development. Jun had 20 staffers in 2012 and added 10 more in 2013. The company expects to add an additional 5-10 staffers this year as well as it builds out its presence in other cities, such as Detroit, where it's seeing increased business from automakers.

The other big focus for Jun is on its OverDrive ad platform, which was introduced in beta last June and made its full debut in October. Jun describes Overdrive as a sponsored content – or native ad – that reflected a shift from emphasizing its video ad network to centralizing custom placements on a marketer's property.

"OverDrive was born of a simple insight that our ad ops team had, which was that a lot of clients were investing a lot less in Facebook than they previously had," Reichgut said. "Facebook was their de facto social network. But as other social tools became more ubiquitous, we saw our brand clients grow to become publishers again. That meant they became more interested in building these social content structures into their own properties."

With OverDrive, instead of taking a video and blasting it out to Jun's whole network, it allows viewers to interact with the content on the client's page. "We sold 190 engagements last year with that property," Reichgut added, noting that OverDrive accounts for more than 30% of its revenues.

In the meantime, Jun is keeping its premise as a guaranteed, opt-in placement service, though it is also starting to explore adding more real-time bidding functions as well. Nevertheless, as many other companies attempt to build a SaaS business model, Jun will continue to charge based on volume.

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