Start-up Keystream is unleashing a new technology (SmartAds) that places overlay ads in “blank” spaces in online videos, things like a grassy field, bare walls or the sky. According to Online Media Daily, Keystream believes these ads “will prove superior to pre-rolls and overlay ads placed at the bottom of the screen.”

Instead of covering the lower portion of the screen like the current crop of overlays, Keystream’s SmartAds are intended to pop up anywhere that won’t block the action.

The ads, which typically play for 10 seconds every one to two minutes, can be targeted contextually and by audience demographics. Web publishers also have the ability to limit how often and where ads appear within content.

In testing across 6,000 videos of varying lengths and types of content, the SmartAds have generated click-through rates in the high single digits and overall interaction rates of better than 20%, according to company executives.

Keystream CEO Schuyler Cullen noted that “We have not had any negative comment or feedback,” to which I would add a major YET!

TechCrunch writer Robin Wauters is aghast at the thought, and winces at the company calling the ads “smart.”

Sounds more like a DumbAd to me. If a video stream includes a scene featuring a big blue sky, a white wall or a grass field in the background, the maker probably put it in there for a reason. Who in their right mind would want to see ads placed right on top of those, even if that’s not where the ‘action’ is taking place? Annoying people with ad overlays that cover vital scenes or parts of a video stream is even worse, but not that much.

The company’s press release reads: “blank spaces are found on average once every two minutes, providing an ad insertion opportunity that increases video ad monetization.” So that means you can expect to be bothered about 15 times if you’re watching a 30-minute video stream.

And they still have the nerve to say SmartAd “offers dramatic improvement in user experience” and that the ads are “non-obstructive” and “increase audience engagement”. I’d say they have a good chance to increase gagging and uncontrolled outbursts of anger by people who are tired of being fed irrelevant advertising without the ability to turn it off, but maybe I’m missing something.

There are a lot of companies developing creative ways to bring the TV ad experience (interruption) and the print ad experience (display) to the Web, and you almost always read how these new innovations increase ROI for advertisers. But the advertisers (and their money) aren’t in charge; users are in charge, so I think the ultimate online solution for advertisers is going to be based on some form of COI — Cost Of Interaction — rather than entirely how it benefits the advertiser.

As I’ve tried to teach my kids, just because you can doesn’t mean you should. That’s the way I view this.

This entry was posted on Monday, November 10th, 2008 at 11:28 am and is filed under Advertising, Disruptions, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.