Mountain View ad startup KeyStream came out of stealth mode Monday with a new ad format that allows publishers to insert copy in the "quiet spaces" of video.
The new feature, called SmartAd, uses an algorithm that automatically identifies and inserts ads into portions of the video stream that aren't exactly essential to the clip's digestion. Think: put an ad on every square inch of a race car or baseball infield fence.
The SmartAd incarnations are typically ten second spots that run every one to two minutes and which can be inserted into live or canned content.
The good news? The average click-through rate on SmartAds is between 5 and 6
percent, compared to the 1.1 percent average that overlay advertising gets according to LiveRail's third-quarter 2008 State of the Industry online video advertising research report.
The bad? Despite the better-than-average click-through rate, viewers say they hate them
ITV and Freesat are already testing out the technology in Britain where, NewTeeVee reports, viewers of ITV are already complaining about the format.
Ed Bartlett, UK Vice-President of in-game advertising provider, IGA, tells New Media Knowledge: “This move smacks of desperation in a time where advertisers are looking for engagement, context and measurable ROI, and ITV would be better off focusing efforts in this direction rather than simply trying to fill space with logos.”
Keystream raised $1.3 million in venture capital led by Voyager Capital and joined by a couple of angel investors at the beginning of the year and is now looking for a second round.
