As with the long awaited year of the mobile, the coming of age for
online video has been much heralded and yet late to arrive. More
people are of course accessing video content, and it is becoming an
increasing part of the average web users day to day experience.

There is a fundamental difference however between the users choice to
self select to view video content, through a provider like YouTube or
the BBC’s iPlayer, or being force fed it in terms of a non requested
advertisement. That discrepancy is highlighted by the difference
between how much video content is viewed and how much it makes, with a
recent IAB/PWC report suggesting that video currently accounts for
about 3% of online advertising revenues.

Popular ways of monetizing video content have been through pre and
post roll advertising, essentially placing a TV like ad before or
after the content that people have chosen to view. Other methods have
been placing links to relevant products next to the chosen clips, or
simply selling the video inventory on a cost per view basis as part of
an overall branding strategy.

Despite video’s massive potential though and the excitement around it
none of these solutions appear to have cracked the market. The search
for a way to realise serious revenues has resulted in numerous
initiatves, the affiliate links on some YouTube content and earlier
this year the formation of ‘The Pool’ industry initiative, a think
tank initiated by Starcom MediaVeste partnering with Microsoft, Yahoo,
CBS and others to determine the best formats for video advertisements.

Despite the fact that video formats themselves appear to be having
difficulty as of yet in attracting ad spend, the effect on the site
hosting the video may be more positive. Video content is ranked
highly, giving sites with it, pardon the pun, more visibility in
search, and generating more engagement.

Sites like www.telegraph.co.uk, www.economist.com etc increasingly
offer up more for people to watch as well as read. This content
therefore can have incremental benefits in the popularity of the sites
and the amount of traditional display inventory available to sell.

With video we’re probably still at the 1.0 level of development, but
what is likely is that it will place an increasingly large part of the
web’s overall coming of age. Whether this is as part of the overall
mix or as a differentiated revenue stream though is not clear.

The deciding factor will be how users to choose not only to access
video content, but how they interact with it. Whatever, there’ll
probably be a lot more of it to choose from in the years ahead.