New Tool For Creating Online Video AdsNew Tool For Creating Online Video Ads

Having found places for ads on every stationary pixel of a Web page, advertisers and online publishers are becoming comfortable with perhaps the ultimate online advertising vehicle: full-motion video.

EyeWonder is offering a product-service combination that displays video ads the way TV networks display them: among the video programs. The ability to do this isn't new, but it does point to the growing acceptance of the rich online media. EyeWonder has made a name for itself with software that embeds video into conventional banner and skyscraper ads.

From the perspective of Web surfers, the so-called in-stream video is like watching TV. They click on a page's link leading to a video clip. Before the desired clip begins, they see a video ad. Once the ad's over, the clip they chose automatically begins.

EyeWonder does this by using a proprietary compression algorithm, or format, says Jason Scheidt, director of marketing. Its Pre-Roll Video Ad format obviates the need for another media player, like RealPlayer and QuickTime. The format works on 97% of Java-based, non-Mac browsers, Scheidt says.

That's an advantage for publishers and advertisers, who now must decide on which media players an ad will run. No media player has locked up the market yet. Jupiter Research estimates that U.S. revenue for all forms of video ads will increase from $121 million this year to $657 million in 2009.

EyeWonder is charging about $5 per thousand impressions delivered by the format. The first Pre-Roll Video Ad format customer is America Online, which is using it on its new Video@aim portal, Scheidt says. An AOL executive couldn't be located by deadline to comment.

Nate Elliott, an associate analyst with Jupiter Research, is unimpressed by EyeWonder's product. It's fairly late to the market, Elliott says. ESPN and Yahoo are two of the many companies that already use in-stream video. And most major online publishers create in-stream video ads using in-house resources and expertise.

"In-stream has been around for years," Elliott says. "Advertisers are moving to it because in-stream is better." People wanting to see a video already don't usually feel a video ad is intrusive.

"I don't see a large role for [video-formatting companies]. They're adding cost and complexity," he says.