• by Ross Fadner , October 16, 2003

In November, AOL will introduce advertising into one of the most haloed, and previously uncommercialized grounds of online media: instant messaging and the move has got potential buyers both interested in the marketing opportunities, as well as curious about how consumers will react to a new commercial invasion.

AOL this week confirmed it will begin inserting streaming video ads on its AOL Instant Messenger (AIM) service on Nov. 7, when Time Warner sister unit New Line Cinema runs a 15- to 30-second trailer for new Will Ferrell comedy Elf in a new advertising slot that will be positioned just above its users' Buddy List.

The ads will feature rich media technology from Eyewonder and will be interactive, allowing users to stop, replay and enlarge the spots.

The Buddy Video Spots, as they are being referred to, will only run on AIM, not the AOL service. AIM users do not have to be AOL members to get and use AIM. In fact, AIM receives 34 million monthly uniques compared with AOL's 26 million. AIM users also tend to be slightly younger.

Ads will be sold in dayparts targeting to two different audiences at different times of the day.

"We draw the line at 4 p.m.," says Ron Bernstein, vice president of interactive marketing at AOL. "A large part of our morning through afternoon user base is the working audience. After 4 p.m. the kids take over."

Based on these findings, AOL will limit the number of Buddy Video Spots to two per user per day. The afternoon daypart will follow the morning daypart at exactly 4 p.m.

Bernstein maintains the ads won't be intrusive this way, because with the frequency cap, no user will ever see the same ad more than once in a given day.

"We have decided to limit the video spots to two per user per day because this is a brand new advertising product and it's video which some people may find intrusive," says Bernstein. "We're going to wait and see how our users react to the ads before adding more. Expect a fuller scale launch for next year."

Jeff Hinz, senior vice president, director of client services at ID Media is upbeat about the prospect of AIM's new advertising initiative, but as far as contextual marketing is concerned, he is unsure whether AOL will permit the use of contextual marketing tools because of privacy issues. "I'm curious to see if they can," he says, "it would be fantastic because obviously it would make the ads more relevant to consumers."