• by Laurie Sullivan  @lauriesullivan, November 11, 2014

Yahoo on Tuesday announced an agreement to acquire programmatic video advertising platform BrightRoll. The deal -- for $640 million in cash -- will combine Yahoo's desktop and mobile video advertising inventory with BrightRoll's programmatic video platform and publisher relationships, and will create the largest digital video advertising network. The transaction is expected to close in Q1 2015.

The acquisition also aims to accelerate Yahoo’s strategy, which is focused on search, communications, and digital content through growth in mobile, social, native, and video advertising. 

"Video, along with mobile, social, and native, is driving a surge in digital advertising. Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business," said Yahoo CEO Marissa Mayer in a prepared statement. "As with every acquisition, we have been extremely thoughtful about our approach to the video advertising space."

Programmatic video advertising in the U.S. will reach only $710 million in 2014 -- up to $3.84 billion or 40% of digital video advertising in 2016, per eMarketer. U.S. digital video advertising will reach $5.96 billion this year, up 56% compared with 2013. By 2018, that figure should more than double, reaching $12.82 billion. 

U.S. adults spend an average of 55 minutes daily watching digital video content on PCs, tablets and smartphones -- up 25% from the previous year, per eMarketer. Nearly 200 million consumers will watch videos at least once monthly this year, representing 61% of the population.

BrightRoll served more video ads and reached more consumers in the U.S. in 2014 than any other platform, per comScore. Tens of thousands of sites and mobile apps send approximately 2 billion requests per day to BrightRoll to monetize the inventory.