Those annoying video ads that interrupt the loading of a Web page — pre-rolls as they are called by media mavens — may soon be a thing of the past. Increasingly, advertisers are embracing a kinder, gentler type of online video ad, created by New York City-based Vibrant Media, one of the companies featured today at the 3rd Annual Internet Conference, organized by Youssef Squali, managing director, equity research, Jefferies & Co., the New York City based broker-dealer.
Say you're reading a review of the new Dodge Nitro in an online auto publication. As your mouse hovers over the double-underlined word "Nitro," a tiny, brief video starts rolling. If you want to see more, click on it and the whole commercial will play. But if you aren't interested and your mouse strays off the highlighted word, the video clip disappears. The technique, known as user-initiated advertising, "increases the relevancy and decreases the annoyance factor," explains Squali, who "expects to see a great deal of innovation in this category." Squali estimates the worldwide online advertising industry was $30 billion last year and that it will grow to $60 billion by 2010. He identifies Vibrant Media's model "one of the best opportunities in the space."
Founded in 2000 with $500,000 in angel funding, Vibrant Media received $25 million in Series B funding from ABS Capital Partners in 2005. "This has the same potential to scale that paid search had," says co-founder and chief executive Doug Stevenson. Not surprisingly, the company recently began talking to bankers about a potential IPO within the next couple of years.—Mary Kathleen Flynn
See example from Vibrant Media
Continue reading below
