Online Video Ads Finally Find Their Niche

The numbers tell the story of the disconnect between online videos watched and online video ads sold: In December 2007, Americans watched 10 billion online videos, according to comScore. For the entire year of 2007, advertisers spent just $554 million on online video ads, according to Jupiter, while they spent $21 billion on all online ads. So many people are watching online videos, but so few advertisers are trying to reach them.

So what gives? The problem for marketers is that the most popular video site, YouTube, is filled with user-generated content that is too edgy or unprofessional for brand advertising. Many online videos are too short for people to sit through “pre-roll” video ads that play before the content, and people don’t like “overlay ads” that run during videos because they are intrusive. Another barrier for marketers is having to format ads differently for different video-sharing and media sites–not to mention the challenge of gauging how effective the ads actually are.

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