Forecast: Online video ads will reach $775 million

The forecast for online video just keeps growing. According to a new report from eMarketer, video advertising will grow about 89% in 2007, to reach $775 million.

by Kristina Knight

And, by 2011 advertisers can expect to see even more online revenue from online video as the spend is expected to see a sustained growth rate of about 40% to reach about $4 billion by 2011. eMarketer forecasts that about half of the online audience in the US will be watching online video in the next year.

"Video's high engagement factor, combined with the Internet's tracking and targeting capabilities potentially, offers brand advertisers a highly accountable method to sway the hearts and minds of their target audience," was written in the report.

However, all is not rosy in the online video world.

Research from Burst Media indicates that users feel video ads are an intrusion (77%). Also, about 67% of users feel video ads disrupt their surfing habits. Yes, users watch online video but they don't necessarily want the pre-roll, mid-roll or post-roll ads that come with the segments. If users are turned off the the ads supporting the videos, they won't watch and online video will quickly die off.

Are users willing to pay subscription fees to watch the content? No. According to research from Piper Jaffray, 79% of users said they would not pay to watch online video.

So, though the forecast is rosy for online video, the future is still in question.