While the use of online video has become an influential and effective way for advertisers and publishers to promote their products or services, the practice is also intrusiveness and lacks compelling features. The integration of artificial intelligence into online advertising is boosting video ad effectiveness while enhancing view experience, local media is reporting (in Chinese).

Artificial intelligence is sweeping the technology industry, making waves in everything from unmanned vehicles to online advertising. This new advertising model will be a blessing for video-streaming websites in China, which have slid into huge losses in recent years despite enjoying robust growth in terms of average daily viewers, video views and watch time.

Losses (in Chinese) even widened for some big Chinese video streaming firms. Chinese search giant Baidu’s streaming video unit iQiyi incurred a loss of US$ 398 million last year, while e-commerce powerhouse Alibaba’s video streaming service Youku Tudou, which has yet to publish its 2016 annual results, saw a net loss of around US$ 68.5 million in Q3 2106 alone.

The new advertising mode may provide a viable solution for both publishers and video content providers to monetize online video. Take Taiwan-based AI startup Viscovery as an example.

Founded in 2013, the AI startup focuses on image recognition and video content analysis. The company launched the “Video Discovery Service” (VDS) integrating computer vision and deep learning technology, able to recognize seven major categories in videos: face, image, text, audio, motion, object, and scene (FITAMOS).

The innovative VDS service, which can fulfill more than 20 million auto-tagging requests on the back of a database of over 10M commercial product SKUs, can help advertisers capture every frame of business opportunity and place the ad accurately to the second. Viscovery secured US$10 million in funding (in Chinese) from its lead investor China Development Industrial Bank.

Viscovery is not alone in this brand-new advertising initiatives. Its foreign peers such as Veritone, LoopME, and Kiip have been active in integrating artificial intelligence into online video advertising in a bid to enhance user experience and thus engage with more viewers.

The application of artificial intelligence is poised to disrupt online video advertising soon, which is a market too huge to neglect. According to a report recently released by research firm Zenithmedia, online video advertising is growing at 18% every year and may total US$ 35.4 billion across the world by 2019.