• by Steve Smith , Staff Writer @popeyesm, February 2, 2009

In the never-ending struggle to monetize digital video, technology providers are throwing ad units at every last pixel of visible real estate: pre- and post-rolls, bottom-third and pop-down overlays, and media player skins. The only space left may lie inside the frame itself, in all that background empty space where video action doesn't occur. Keystream Corp.'s SmartAds promise a new style of interactive overlay unit that pops-up a contextually
relevant message in the areas of a video clip that are outside of the main action but still in the user's direct view. Unlike pre-rolls, which can discourage usage, and standard overlays, which indiscriminately mask part of the action, "the key is that SmartAds are non-interruptive, non-obstructive and give immediate access to the content," says cofounder Schuyler Cullen. A teaser like "Hungry?" or a brand logo might pop-up in the empty background of a cooking how-to clip or the sideline grass of a baseball-game replay. The user mouses over the unit to see more information or pause the video and open a new landing page.

 
This isn't as easy as it sounds. Keystream has been in stealth mode since its creation in 2004, developing eight patents for video analysis. The trick comes in locating that empty space on the fly and inserting interactive ad units in just the right place at just the right time across a wide range of clips. When the ads and the video match, the result is a new sort of highly integrated ever-changing ad placement that begs for interaction and resists the usual ad fatigue of wraparound and lower-third overlays. In an early test of three ad clients with SmartAds, "the rollover rate is consistent - 20 percent to 25 percent [of users] play with the ad," says Keystream cofounder Ed Ratner. "Click-through rates are in the high single digits." And users aren't complaining about in-frame units. "This is more discrete than watching that Aflac duck waddle across the bottom-third of the screen," quips Cullen.

Gartner analyst Andrew Frank says Keystream's version of the tv "bug-ads" will appeal to some advertisers because they are skip-proof and relatively non-intrusive. "Perhaps more important, though, the technology behind the ad format is part of a wave of techniques that can analyze video and track objects and, in general, enhance online video experiences in innovative ways," he says. This could open up new sorts of overlay techniques both for advertisers and video-makers. Nevertheless, the SmartAds format seems positioned best for those high-quality short clips that users want to see quickly and without the experience-killing lurch of a pre-roll. Keystream supports both Flash and Silverlight video platforms and is designed to be content agnostic, aiming for everything from sports clips to reality TV, user-generated content and live streams. Even Cullen admits, however, that an in-frame bug is not appropriate for all online video circumstances. "For some content, this won't be the first option," he says. "We don't expect this to go into Gone With the Wind."