SoMedia Network’s deal with Google could be transformative, says Euro Pacific

Euro Pacific Canada analyst Rob Goff says SoMedia Network’s (Stock Quote, Chart, News: TSXV:VID) deal with Google Partners could mean big things.

Yesterday, SoMedia announced it had launched a new full-service video ad production platform called SoMedia Ads. The company says the service will make ordering, managing and deploying original video ads for YouTube simple and convenient.

“SoMedia is committed to enabling the expansion of video advertising on on-line video content hubs, social networks and video ad networks to small and medium-sized businesses,” said founder and co-CEO George Fleming. “Video advertising today is dominated by large national advertisers that have large budgets but represent a small portion of the total potential video advertising market. SoMedia Ads makes the compelling return on investment of video advertising accessible to millions of new advertisers through its affordable, simple, full-service video production solutions.”

Goff says the deal could be a game changer for SoMedia, which he notes has spent eight years and approximately $20-million to build out its cloud-based video content production platform. The analyst says he believes recent industry forecasts that predict online video advertising will grow by 25% to 30% over the next two years.

“The prospective scope of the market accessible through the Google Partner network represents a paradigm shifting opportunity given the conservative market share, adoption, and usage assumptions,” said Goff. “Even the scale of the trial should be game changing when measured against SoMedia’s corporate history of roughly 2,500 videos sold up to the end of Q314. While details are not public, the program clearly demonstrates Google’s commitment to driving SME adoption of video advertising and SoMedia’s ability to gain the confidence of Google on the project.”

Disclosure: SoMedia Networks is an annual sponsor of Cantech Letter.

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