Marshall Eubanks, CTO of Destiny Conferencing until its recent sale to Polycom, and Mike Smith, member of the Angel Capital Association and head of his own business development firm, MSBD, have created Broadband Advertisements to leverage the recent boom in Web advertising. The company’s first client is AmericaFree.TV - a free Web entertainment and streaming content portal.

Broadband Advertisements will generate ad revenue through placements into streaming media and download video sites, and also by providing Flash videos, banners or hyperlinks on movie and entertainment Web sites. Mid-sized companies and smaller retailers who want a simple way to automate the posting of ads and direct marketing will look to Broadband Advertisements, say the new owners.

“Broadband Advertisements owns a proprietary content management system and will offer an egalitarian, easy-to-use Web advertising posting program,” said Mike Smith, president of the new venture. “We expect other online communities involved in cooking, travel and social commentary to join the effort shortly.” Smith and Marshall Eubanks collaborated in the past on Multicast Technologies, Inc. and have worked together in both streaming media and videoconferencing over the past decade.

Research shows that customers are 70% more likely to make a purchase after viewing a video than viewing print ads, and that a well-produced online video increases retention by 50%. A sharp rise in broadband connectivity is spurring the use of video across the Internet with 64% of all U.S. Internet users streaming some video online last year.

Marshall Eubanks, chairman of the board of Broadband Advertisements, added: “Video is the most successful advertising medium in world, and it is clear that this is rapidly becoming true on the Internet as well. Video ads are highly adaptable sales engines that can be placed into a streaming broadcast, delivered as a product promotional video for a Web site, or even as direct marketing. Traditional video advertising is placed by agencies that understand their customers, the broadcasters, and the market, and we are extending the same model to Internet video. This should result in both better results for advertisers and higher revenues for our content partners.”

Eubanks, an MIT graduate, and Smith, a Northwestern University graduate, believe streaming media offers clients more purity, with cleaner ads, than social communities like YouTube afford. They also believe content sites using streaming will aggregate more audience share for their advertisers.

“Clearly, there is a future for social media like YouTube, but more traditional broadcasters also have a bright future on the Internet, particularly as more and more people start watching Internet content on their home TV sets. There is no good channel right now for ad placements on streaming media sites like AmericaFree.TV and the other companies with which Broadband Advertisements is involved, and we intend to provide it,” said Eubanks.

The company believes both retailers and content providers will benefit from a more transparent ad placement model tailored to their needs and that these companies will wish to retain the money they currently lose to middlemen seeking a large, but typically hidden, percentage of the revenue from both online ad placements and online ad sales.

The two entrepreneurs are providing initial capital for the start-up.