• by Laurie Sullivan  @lauriesullivan, April 12, 2010

Image Space Media will introduce an ad format next month to provide publishers with a little pizazz, followed shortly after by a self-service Web-based platform for advertisers.

The New York City startup has developed technology that allows publishers to place an ad over on images when they hold the rights to the photograph. People who view the photograph and ad can close it by clicking on the X.

Today, the transparent overlay that appears as a text-based ad unit appears on the lower-third of a photograph, but will soon offer animation and interactive links.

Think AdSense lower-third ads on YouTube videos. Only the Image Space Media ads appear as an overlay in photographs on publisher sites. The publisher must own the copyrights to the image, says Jesse Chenard, chief executive officer at Image Space Media, which operates as an ad network.

The Flash-based ad can support hot links and animation, Chenard says. "Picture a bottle of beer in the lower corner of the ad," he says. "Let's say it tips over and fills the ad with what looks like foaming beer."

The JavaScript layer that sits on top of the photo works similar to any rich media or Flash ad. There are more than 3,000 publishers in the ad network. In aggregate, the network generates more than 740,000 clicks and serves ads to 46 million unique monthly visitors per month.

Within the next month, ISM will introduce for smaller advertisers a self-service panel. The company also has a direct ad sales force, and it works with several ad feed providers.

Image Space Media doesn't offer ads based on IAB standard unit sizes, images that are 300 x 250, banners, and skyscrapers. The format requirement sits at about 200 x 100 pixels.

"We hope to get past contextual ads and move toward audience targeting," Chenard says. "It would leverage other targeting provider data, such as eXelate, Quantcast, and BlueKai."

Image Space Media continues to gain traction. In January, the company announced $2.9 million in series "A" funding from New Atlantic Ventures and Limelight's Mike Gordon. The following month it brought in former Sphere/AOL executive Jeff Yolen to spearhead sales.

Aside from official relaunching the company at SXSW conference in March, Image Space Media also rolled out the PubStop platform, a detailed reporting and analytics tool for images that allows publishers to identify the most popular that yield the highest return. The taxonomy engine allows for fast categorization of images and can serve up relevant ads to the site visitors.