• by Gavin O'Malley , Staff Writer @mp_gavin, October 12, 2011

What happens when ads start appearing within ads? Does it inevitably lead to ads within ads within ads, and, ultimately, an M. C. Escher-like infinite loop of online adverting? More to the point, can this approach actually improve any single ad’s performance?

Jason Wilk, co-founder and CEO of Y Combinator-backed 140Fire, thinks it can -- at least when it’s limited to a single, interactive banner ad layered over a related streaming video ad.

Also backed by one Mark Cuban, Wilk says 140Fire has tried to keep a low profile until now. Sufficiently confident with his product, however, Wilk is now showing off what he believes to be the future of online advertising. (Sorry, VivaKi.)

“We have a product called DataRoll, which adds a layer of interactivity on top of an existing video ad,” Wilk tells us. “Generally these overlays are questions or polls related to what is being advertised.”

On average, when DataRoll is part of a video ad, 7-10% of consumer will interact with the ads, according to Wilk, while promising that DataRoll increases the likelihood a consumer will click-through on a video by as much as 200%.

This week, 140Fire released a platform for agencies to create these interactive overlays on the fly.

“Advertisers also come to us who are looking to achieve a ‘Smart Buy,’” according to Wilk. “We not only provide the interactivity, but we also will help advertisers plan out their media spend through our own network of video publishers.”

So, what's different about 140Fire’s network? “Unlike larger ad networks, we can use DataRoll to effectively see which publishers have an audience that are willing to interact with a specific brand,” Wilk boasts. “If consumers aren't engaging, we can quickly adjust on the fly.”

Presently, all of 140Fire’s publishers are DataRoll certified, which, according to Wilk, means that their users have showed an “exceptional willingness” to engage with advertising. “No other network can say this,” he adds.