Project Canvas, which would use an open internet connection to deliver on-demand viewing to television screens, is currently being scrutinised by regulators.
Canvas's predecessor Project Kangaroo, a video-on-demand venture between BBC Worldwide, ITV and Channel 4, was blocked earlier this year for being anti-competitive.
ISBA has given its support to the new project in its response to a BBC Trust consultation on the issue.
If the Trust approves Project Canvas in July, the service could be available via TV sets in early 2010.
Michelle Sherlock, media and advertising manager at ISBA, said: "ISBA has responded to the consultation on behalf of advertisers and our submission has reflected the need for an important commercial counterbalance to the BBC's iPlayer.
"Subject to caveats including economic regulation similar to linear channels and prevention against 'gatekeeper' practices, ISBA has endorsed the initiative."