Online video advertising is growing at an exponential rate.

Check out these stats:

  • In 2010 video spending will reach $1.5 billion, up 48% from last year [eMarketer]
  • Online video advertising and related media spend is forecast at $2.7 billion in 2010, and double-digit growth is projected through 2012 [AccuStream Research]
  • Advertising in video streams will also continue to grow, up more than 60% in 2011 to $5.6 billion, with 2 out of every 5 streaming video ad dollars being spent by local advertisers [Borrell Associates]

However, even with this growth, advertisers have reservations about online video adoption according to a new BrightRoll study. Reasons cited include:

  • Lack of standardization of ad formats across networks 
  • Interruption to user experience
  • Lack of metrics

So, what can marketers do to prove the efficacy of online video ads? Here's a few ways to make online video ads more effective:

  • Make sure the videos are contextually relevant. You won't get views if the video is not relevant to the user.
  • Display the video to a targeted audience. You won't get conversions if you aren't showing your online video ad to the people that need to see it.
  • Be able to prove that conversions were a result of video viewership. Answer the question 'did the ad convince the consumer to buy?'

What's the most effective online video ad you've recently encountered? Please comment below.