Brands are starting to worry about brand safety in OTT — and a YouTube-focused startup is trying to solve it

Channel Factory

Brands are starting to pour money into advertising on OTT video services as people cut the cable cord.
Channel Factory was founded in 2014 to help brands make sure their ads were shown against suitable and safe videos on YouTube.
Now it’s expanding its sales staff with the hire of a top former Washington Post sales leader and planning to extend its capabilities to OTT.
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Brands are starting to pour money into advertising on OTT services as people cut the cable cord.

Ad-tech company Channel Factory was founded in 2014 to help brands match their ads with suitable and safe videos on YouTube. Tony Chen, CEO and founder of Channel Factory, has grown it to 60 people using funds from his first company, SEO-focused Yellow Thunder Media. He said the company isn’t profitable yet but is growing "rapidly."

Now Channel Factory is expanding its sales staff with the hire of Washington Post vet Jed Hartman as its first chief commercial officer and is planning to extend its brand safety and suitability services to OTT.

Hartman was the top ad sales executive of the Post until he left in October. The Post gave no explanation for his departure. At Channel Factory, his remit is to grow sales and add another 12 to 24 people to its sales and marketing team of 10. Currently, Channel Factory claims to work with 200 Fortune 500 companies. It lists clients including Samsung, Toyota, and Lego.

"Brand safety and suitability get harder every minute with the volume of content being created," Hartman said. "I saw a fit because I wanted to focus on digital video and data/machine learning.’The industry’s looking for transparency and safety in the largest bucket of content in the world."

Chen said that as brand safety became a bigger challenge for brands advertising on YouTube, his company went from focusing on providing contextual alignment to providing brand safety tools.

Channel Factory gives content creators software to grow their YouTube audiences in exchange for information about their audience and content that it then uses to help brands with planning and buying their ad campaigns on YouTube.

Next up, Channel Factory is working to expand its platform, ViewIQ, to OTT, where Chen believes brand suitability is becoming a bigger concern for brands that want to make sure their ads are matched with appropriate and contextually relevant shows. Eventually, he said, he plans to integrate blockchain into the platform to enable brands to get verified information on how channels perform on YouTube. He didn’t give details about what the new offerings would look like or share a specific timeframe for the expansions.

Channel Factory faces plenty of competition for brand safety services

Of course, there are already plenty of other vendors promising to solve brand safety on YouTube, including OpenSlate and Pixability.

And when it comes to OTT video, especially on connected TVs, agencies are more focused today on fraud than brand safety, although that could change.

"Contextual brand safety is less of an issue as most CTV is professionally produced content except where you have crossover with digital properties like YouTube and Twitch," said Joe Barone, managing director of brand safety America at GroupM.

Of particular concern are free, ad-supported streaming services like The Roku Channel and Tubi, which have long-tail content that may not be audited, said another agency source.

Video on demand services have a range of content, and that’s where the challenge comes, Chen said. "A big portion of YouTube’s new viewers are now on OTT, and we are helping advertisers solve brand suitability similar to what we provide on mobile and desktop."

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