Keystream serves innovative online video ads

Pete Wylie — Fri, 07 Nov 2008 16:10:18 -0500

Online video advertising start-up Keystream officially launched its innovative in-stream, interactive ad service today in the U.S. The company has been in incubation mode testing its product with a media company in the U.K., and the company's founders, Schuyler Cullen, CEO, and Ed Ratner, president, think their model is now poised for big expansion in the U.S.

Keystream's technology searches online video content for intuitive locations of static space where ads can be placed unobtrusively. Cullen and Ratner said their research indicates that a static space opportunity for ad placement occurs about every 100 seconds in most online video content. Keystream offers a range of ad formats that can be inserted as well. They range from simple logo placements, to "flip" ads that have a teaser line that turns to reveal the brand after interaction, to full rich-media presentations that activate once the user scrolls over them.

Cullen said Keystream's test results with its first customer were spectacular.

"We've seen big increases in CPM's compared with pre-rolls and banners," Cullen said. "Our ads have gotten click through rates in the high single digits, compared with a tenth of a percent for pre-rolls."

If Cullen isn't hyping the results, Keystream may have hit on a novel way to monetize online video content. After a demo of the product, it seems highly unlikely that he is exaggerating at all.

Keystream pitches its product with a side-by-side comparison of its ads versus traditional pre-roll ads as the video plays. Since the video begins right away, instead of being preceded by a 15 second ad, there is not down time for a user to lose interest. Also, the algorithm Keystream uses places the ad in static space that doesn't affect the viewing experience, like lower third banner ads can. The appearance of the ad in the video also draws a user's attention to it, increasing brand awareness and interaction.

Ratner said Keystream's test customer received a lot of negative feedback after instituting a pre-roll campaign on their video assets, but after switching to Keystream, those complaints ceased almost completely.

Keystream also has analytics baked into its solution, so the ad a user is served is uniquely matched to the geographic and demographic info associated with the IP address. Keystream plans to monetize with a revenue share model with advertisers on host sites.

For more:
- see the company's beta test here

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Keystream serves innovative online video ads