• by Gavin O'Malley  @mp_gavin, September 27, 2007

To attract a larger audience, Microsoft on Wednesday launched a new version of MSN Video with more dispersed ad-placement, and a centralized page where viewers can simultaneously stream videos and search through the entire MSN Video catalog.

Visitors to MSN will now see an ad after every three minutes of clips. Previously, they were subjected to a video ad for every two clips--but, because some of the most popular clips are only seconds long, viewers were put off by the disproportionate ratio of ads to content, according to Rob Bennett, MSN's general manager of entertainment, video and sports.

"We knew it was time to change the frequency of ads when people were getting more ads than content," he explained. "It's about getting people to consume more video--that's our strategy."

Slowly but surely, online content carriers have come a long way since the days when running a video ad meant streaming a re-purposed 30-second TV spot before every sliver of content.

"It obviously never made sense to run a 30-second ad against a 10-second piece of content," reasoned Forrester Research analyst Charlene Li.

But intense competition for audience share is demanding that MSN and its myriad rivals improve their offerings--and do it fast. Last month, YouTube said it would begin overlaying ads on the bottom of its online video, rather than resorting to streaming that interrupts the viewing experience.

To engage viewers for as long as humanly possible, the new version of MSN Video also includes "always be watching" technology, which lets consumers browse and view videos at the same time. In addition, MSN Video users can now create video playlists to share with friends.

What's more, the browsing experience is no longer limited to a single vertical within MSN's video archive. From a single page, viewers can access content related to news, money, sports, and autos, among other categories, along with user-generated videos from Soapbox.

To further increase its reach and presence, MSN Video is presently being integrated into every MSN channel.

Bennett, meanwhile, insists that MSN Video's content and brand partners haven't seen anything yet in the way of innovation. The recent arrival of aQuantive to the Microsoft family, he said, will result in major advances.

"We're having a lot of discussions with [aQuantive's ad serving unit] Atlas about how we can improve ad serving on MSN Video," Bennett said. "We're looking to greatly improve the sales process."