New York, September 20th, 2012 —(Wall Street Journal)— Computers' ability to easily read text paved the way for online search advertising to become a multibillion-dollar business. But reading images is a different story.

Roughly one-third of the content that appears on websites, or about three trillion images a year, is mostly illegible to computers. Solving this challenge would create a new stream of revenue for online publishers.

"Computers today are not good enough at looking at an image and understanding what an image is about," said Ophir Tanz, founder of in-image advertising company GumGum Inc. "It's one of the most challenging problems out there."

GumGum is among several start-ups trying to find a working solution. Each of the companies, which also includes Vibrant Media Inc., Luminate Inc. and Stipple Inc. approach the technological problem in different ways.

But all seek to teach computers—sometimes with human help—to understand what a photograph represents so that they can serve relevant advertising on top of or attached to it. They then split the advertising revenue with publishers.

The opportunity is wide open as even Google Inc., the leader in Web-search ads, has yet to offer a way to serve ads within photos. Google declined to comment.

Google's venture-capital arm does back Luminate, which creates ads that appear when readers move their mouse over an image. A Luminate-tagged image may tell a reader how to buy clothing similar to what a model is wearing.

A combination of human experts and computer algorithms tag the images. In other cases, like for a recent project for Fox Sports, Luminate's technology doesn't serve ads at all, but merely more information in the form of stats about a player.

Fox Sports is owned by News Corp., which owns The Wall Street Journal.

In both cases, the interactivity increases the time readers spend looking at an image as much as nine seconds per picture, said Luminate CEO Bob Lisbonne.

"We think that this is a huge new chapter in the role of images, and points to a day when consumers won't be content to merely look at a picture, they will expect to be able to interact with it," he said.

Vibrant, in contrast, offers ads that appear like a small strip at the bottom of an editorial photograph. Vibrant figures out what's in the photograph primarily using the text associated with it, like captions and the surrounding article.

That allows them to process "billions of photos and process them in minutes," said Kevin Tung, who heads up Vibrant's in-image advertising business.

Vibrant, which works with publishers including Daily News LP, CBS Corp. and Demand Media Inc., argues that its advertisements work better than regular display ads because readers have gotten used to tuning out anything on a Web page that is not part of the actual story and illustration.

GumGum uses more than just text to interpret an image. The company's software evaluates the pixels of the images and uses facial recognition and "image clustering" to identify people or items in pictures.

Humans are only used to make sure that the images are "safe" for the advertisers to be associated with.

The company has received $10.8 million in venture funding to date, with $7 million coming from New Enterprise Associates last October. "GumGum is creating a vehicle for a lot of brand dollars to flow into the online space," says Krishna Kolluri, a partner at NEA who sits on GumGum's board. GumGum fetches anywhere from $6 to $30 per thousand views, depending on the category, Mr. Tanz said. "It's premium advertising," he said.

In the next few weeks, Hearst Corp. will be rolling out GumGum's image recognition and targeting technology on the Hearst women's network of sites, according to Kristine Welker, vice president and chief revenue officer at Hearst Digital Media.

Publishers like New York Times Co.'s Boston.com, Gannett Co.'s Metromix and Tribune Co.'s RedEye.com have also signed on to put GumGum image ads on their photos.

Many advertisers and publishers are taking a wait-and-see approach to image-related ads.

"The way we look at it is, it's an interesting test right now," said Jason Gole, a digital media director at Interpublic Group of Cos.' media agency UM who has worked with Vibrant on Chrysler Group LLC advertising.

"On the one hand, it's a new way of delivering a targeted advertisement, which is always interesting," he said. "On the other hand, you are adding another unit to an already cluttered page."

Some publishers worry that their ads might appear on inappropriate images, or that annoying pop-ups might drive away readers.

Examiner.com, the network of local news websites which signed on with Vibrant Image's predecessor last year to test in-image ads, has "paused" its relationship over user-experience concerns, according to CEO Ashish Kapur.

Demand Media, the content creator that uses algorithms to decide which stories to write based on expected Web traffic, has also been testing in-image ads with Vibrant and GumGum in the last couple of years. But the company hasn't decided to go all-out in the space yet, said Mike Wann, Demand's senior vice president of business development.

"The engagement rate and click-through rate is decent," he said. "The caveat to that is, the type of experience you have on the page. If you go through a slide show, it's a pretty poor user experience."

Ezra Kucharz, president of CBS Local Digital Media, said working with Vibrant's in-image ads has been a "balancing act between being too invasive and moving on the revenue opportunity."

However, he added, "The numbers don't lie—we continue to see steady engagement."