Online Video Ads Growth and Challenges

Here’s an interesting graph from a Wall Street Journal article yesterday about the continuing efforts to figure out the best way to monetize online video, which is considered the gold mine of Web 2.0.

That is, if anyone can create innovative advertising beyond the weak ideas thus far, like the 15-second preroll–a wretched experience that only an advertiser could love.

In a recent interview on ways to make money on his own online video business that could be seen universally, Veoh Networks’ new CEO Steve Mitgang noted: “We’ve really created a great product; we haven’t created a great business. … We need to make money.”

Indeed. Powerhouse YouTube only generated about $30 million in revenue last year, despite the gigantic growth in audience. All the big players are experimenting with a variety of ideas, such as overlays, though none has broken out yet.

If they do, the business could grow into the billions from $410 million last year.