With the surrounding buzz of a new web site called YouTube displaying user generated videos, Waikit Lau decided back in 2005 that serving ads within online videos would be a challenging project to undertake.  Despite the technical difficulties of extracting information from videos back in 2005, Waikit setup Scan Scout and has spent just over the last two years developing technology that can place demographic, geographic and contextual overlay advertising within professionally produced and user generated online videos.

Speaking to AdMarkTech, Waikit, Co-Founder and CEO of Scan Scout stated, “Our technology applies to proven publishers of any video content, it works across the board.  We have a large database of publishers.”  Having recently closed a deal with Broad Band Enterprises, he added “We are the exclusive overlay provider for Broad Band Enterprises”.  This currently represents around 1,800 advertiser sites.

The technology also allows ad networks to serve ads across the growing Scan Scout publisher network, effectively being published within the video streams, as well as handling advertiser specific campaigns.  The overlays are created and professionally repackaged in-house at Scan Scout, but advertisers also have an option to submit their own creative, following Scan Scout’s creative spec.

Below is an example of a clickable overlay ad for the movie Darjeeling Limited.

There are currently some 30 employees at Scan Scout.  Plans for the future include providing new revenue streams for publishers and the ability to maximize the monetary value of their content.  For advertisers, new tools are being developed to sharpen the existing targeting mechanisms in order to fine tune the reach of advertising campaigns.  Most importantly of all is the user experience.  The Scan Scout overlay technology is being developed to give the user total control over how much or how little they wish to interact with the advertising, while not getting in the way of their viewing experience.

Among the investor list, Time Warner has shown more than an interest in the future of Scan Scout.  With a 13% jump in online video views in the US from February 2008 to March 2008 and a 64% increase from March 2007 the transitional move to online video viewing is more than buzz, it’s a reality.  Time Warner online video properties accounted for 1.4% of the market share of online video views in March (according to ComScore).