Jayant Kadambi and Ayyappan Sankaran, who own YuMe Networks, told Entrepreneur.com why online videos offer internet traders a new way of reaching their markets.
YuMe Networks distributes tracks and video adverts to PCs, mobile phones and TV.
The service enables advertisers to position messages in online video content, in the same way they can do with text and traditional website advertisements.
Kadamba said: "We quickly figured out that content owners aren't licensing good content to people because there was no way to make money on it."
YuMe categorizes online video content which allows advertisers to choose video channels which are most appropriate for their product.
Advertisers can then track how many people are viewing the adverts.
Kadamba continued: "We let them automate the process of figuring out id the ad placement worked better at the beginning of the video or at the end, if it's running too frequently or not frequently enough.
"We want all those levels of optimization available so advertisers and content producers can grow together into something big."
Since its launch, YuMe has been "a virtual dream come true for video webcast advertisiers," according to Entrepreneur.com.
