AOL Looks Beyond Pre-Roll Spots

NEW YORK AOL said it is working to develop an in-stream advertising alternative to the pre-roll spots that currently dominate the market.

AOL has teamed with ad-technology provider PointRoll to develop new rich media products, including a user-initiated brand-advertising alternative to playing repurposed TV commercials prior to Web clips, known as pre-roll advertising.

Tentatively called TickerBoy, the ad unit sits at the bottom of a video player as a clip runs, displaying a brand image and invitation to pause the video to watch advertiser content. Viewers can choose to close the animation while watching the video.

“Our goal is to migrate people off that pre-roll model into something new and more compelling,” said Kathleen Kayse, evp, sales and partnership alliances at AOL.

AOL is looking beyond pre-roll spots as demand for those placements outstrips supply. The online video ad market is projected to grow quickly as more content, created by users and media companies, is posted to the Web.

EMarketer expects the market will triple to $1.5 billion in 2009.

Most major sites, including AOL and Yahoo, have relied on pre-roll ads, which are mostly TV commercials. Other companies are exploring alternatives to pre-roll ads. VideoEgg, for example, offers its own ticker ad that sits at the bottom of a video player and also shows invitations to view ad content at the end of videos. Other startups like ScanScout are also developing user-initiated ads for video.

“There’s not a lot of inventory out there and it’s very expensive,” said Jeff Lanctot, vp, media at aQuantive’s Avenue A/Razorfish.

One major holdout to pre-roll ads: YouTube, which has said they are a bad user experience.

The development deal with PointRoll is part of a pact for AOL to become the Gannett-owned tech company’s “preferred portal partner,” giving it a first look at new ad products. PointRoll has developed several in-banner rich media ad formats. AOL has already developed an ad placement it calls Netstream, which is user-initiated video in a banner unit.

“It’s up to us to prove new models that work for the advertisers,” Kayse said. “It won’t be an immediate change, but it’s up to us to lead.”