Often in the past when I’ve been intimately involved with a new investment here at Masthead, I’ve written blog posts with my thoughts about it. (See previous posts on both NewsGator and Intercasting). Today Tremor Network announced an $8.4M investment co-led by Masthead Venture Partners and Canaan Partners, with Rich Levandov of Masthead and Warren Lee of Canaan joining Tremor’s board.

Simply put, Tremor is an online video advertising network. It provides publishers with a full suite of products and services to monetize streaming video, and gives advertisers the ability to utilize online video ads in their marketing mix. And I believe that the company has the opportunity to create a tremendous amount of value for three very basic reasons: the market, the team, and their approach.

The Market

Back in January of this year, I posted that “There’s no question that the basic premises – the who, what, where, when, and how – of consumers’ interaction with video content is dramatically changing, and that’s getting people excited.” And in a subsequent post I wrote, “How far does digital online video roam? It depends on the available tools which help push it outwards. I think that the interesting startup opportunities are those in the infrastructure (like video advertising networks, publishing systems, editing/remixing services, and search technologies) which help facilitate and participate in the spread of that video content…” Tremor Network fits into this very thesis that there is significant opportunity for startups creating the supporting services which enable video online.

As events of this past year have demonstrated, we are at the beginning of a tremendous shift in the distribution methodology for video, transitioning from broadcast, cable, and DVD rental/sales towards the internet. And as audiences alter their consumption video choices towards an online outlet, all indications point to the fact that the advertiser spending will follow. This major media disruption will create the opportunity for a number of startups along the supporting infrastructure portion of the value chain, but most notably technology and services to make online video ad insertion possible. While the analyst forecasts of the near-term online video advertising market vary (I’ve seen eMarketer estimates that spending on online video ads will grow to $1.5B in 2009 and McKinsey projections that it will grow to between $1.4B and $3.2B in 2007), there’s little doubt that the long term opportunity in this area is a ripe one.

The Team

Founders Jason Glickman and Andrew Reis previously built and sold an advertising network, ContextualNet, and are bringing that experience to their current startup. Tremor’s technical founder, Jesse Chenard, has spent the majority of his career architecting online streaming video technology, so his expertise runs deep. Finally, along with the announcement of institutional investment, Tremor announced today the addition of Randy Kilgore as Chief Revenue Officer. Randy previously spent over sixteen years at Dow Jones & Company, most recently as SVP of Advertising for Dow Jones Online (which includes The Wall Street Journal Online and MarketWatch), and he will complement the team with his extensive experience working with and developing targeted solutions for advertisers.

The Approach

A final compelling reason why the Tremor investment is attractive is the company’s approach to the market. After unveiling its video ad network just over a year ago, Tremor has resonated with both advertisers and publishers alike, and has garnered significant traction with its services. With many companies announcing competitive offerings without any significant supporting technology in place, it is an extremely substantial asset that Tremor possesses cutting edge proprietary video and rich media technologies which are in place now. That proposition, coupled with the reality of positive feedback from publisher and advertiser relationships already established, has led the investor set to become confident that Tremor is going to continue build on its current positive momentum.

In short, I believe that the trends which have created this online ad network opportunity will consistently grow it in the next few years, and I am confident that Jason and his team will continue to effectively build upon what they’ve already successfully started.