When AI eyes ads

Photo credit: Alfred Payne.

“Nobody wants to click,” says Amos Huang, speaking of those ads that appear before you watch a video. And that’s a major concern for a guy who’s building technology for advertisers.

His answer is artificial intelligence and image recognition. With that combo, ads can be smarter – and that means ads that you and I might actually want to interact with.

Amos, who hails from Taiwan, did his BA in advertising. He then took quite a leap to do his MA in artificial intelligence. He studied AI before it was cool – seven years ago. And now, his startup, Viscovery, is basically blending his two majors.

The idea is that Amos’s “deep learning” tech scans the movie or TV series that you’re streaming and then brings up an ad that’s in some way relevant to what you’re watching. So if the characters in the movie walk past a Starbucks, the AI-powered ad machine will pause the stream and play an ad for Starbucks’ latest Frappuccino creation.

Amos Huang. Photo credit: Viscovery.

Or you’re watching football online and Paul Pogba appears on screen. The image recognition bots get to work and pull up the star’s newest Adidas ad.

Amos is betting that because it ties into what you’re watching, you’re more likely to click it than those ads for random things that appear before the stream begins. They’re called “pre-roll ads”. “They’re not efficient,” Amos says of them. Indeed, only 0.8 percent of viewers actually click them; it can barely get any lower than that.

His startup, after partnering with both streaming sites and ad agencies, will instead put the ads “in-stream” by pausing the feed for about 30 seconds, or “out-stream” by sticking a banner or text over part of the video.

Change of direction

Amos and the team last week wrapped up US$10 million in funding to get this system out of the lab and onto the web.

The lead investor was China Development Industrial Bank (CDIB) – which ties into his focus on the mainland China market, where streaming is massive. It’s also hugely competitive as most of the nation’s multiple tech giants throw money at their video sites as part of their growing web empires. Even online shopping giant Alibaba is doing so, as evidenced by its multi-billion-dollar acquisition last year of Youku, China’s top online video firm.

The startup has no revenue now – and has had none from its advertising tech for the past two or three years.

China now has just over half a billion regular online video viewers – from virtually nothing just a decade ago. That has fueled ad revenue from streaming, which was worth US$5.9 billion in 2015. It’s projected to nearly triple to US$16.3 billion by 2018.