Microsoft just introduced a new ad interface that enables real-time optimization using audience data. It’s called VPAID and it stands for Video Player Ad-Interface Definition.

It’s the language between the actual video player and the ad itself. Essentially it enables an in-stream ad experience. One key component to VPAID is that it actually captures user interaction and provides real-time feedback.

Here’s what VPAID aims to provide to publishers, advertisers, and vendors:

* Increasing common video ad supply technology so that video publishers can readily accept video ad serving from agency ad servers and networks;

* Providing common technology specifications for advertisers to develop against, thereby decreasing the cost of creative production and thus increasing business ROI;

* Improving video ad supply liquidity, thus decreasing the cost of integration with each publisher.

Here’s what Microsoft said about VPAID on their blog:

“We’re excited about VPAID because it not only drives interactivity, it also helps with ad sequencing, and dynamic creative optimization (DCO). Ad sequencing reduces waste and enables creative storytelling by enabling brands to tell a progressive story without repeating themselves. And with DCO, video advertisers can provide more relevant offers and messages to consumers by leveraging audience data and real-time optimization.”

“VPAID is another example of Microsoft Advertising collaborating with the industry to make it easier for brands to launch digital campaigns at scale. Advertisers can create one VPAID campaign and scale it quickly across multiple publishers. Microsoft Advertising has already certified seven partners to serve VPAID across our US display offerings, with international markets soon to follow. Our partners include MediaMind, PointRoll, Mixpo, Adotube, Innovid, Vindico, and Tremor.”

To experience what a VPAID ad looks like follow this link. This particular ad features Nordstrom. This type of interactive real-time format is what marketeers and advertisers have been striving for. I don’t know that VPAID is in a refined stage, but it’s certainly a good start.