If behavioral targeting is the great hope for display advertising on the Web, can it work for videos as well? Web video startup Veoh thinks it can and is bringing its behavioral targeting advertising program out of beta today. The ads are targeted at one of nine groups, including viewers interested in action videos, cars, pop culture, sci fi, anime, and family fare.

Veoh groups viewers into these interest groups based on their past viewing, searching, browsing, tagging, and commenting activities on the site. The ad-targeting technology uses some of the same underlying algorithms as its recommendation engine, and were both developed by chief scientist Ted Dunning. He previously built the recommendation engine at MusicMatch (later bought by Yahoo) and credit-card fraud detection algorithms at ID Analytics. The company claims that during the beta, ads that were behaviorally targeted performed twice as good as ads that were not.

Everyone’s trying to figure out how to make ads work on Web video—from YouTube to VideoEgg. A big issue is the quality of the video inventory out there. Many advertisers don’t want to risk associating their brands and products with user-generated video. That includes a large portion of the 100 million videos a month watched on Veoh.

Also, for behavioral targeting to really work, it needs to be done at Internet scale. Veoh not only needs to prove that it can provide better response rates to its video ads, but that it has a large enough inventory of advertiser-safe videos to matter. To do that, it would have to somehow monitor video-watching behavior beyond its own site (which it could do via partnership agreements) and become more of an overall video ad network. It would then have to make sure it doesn’t get tangled up in some of the privacy issues that behavioral targeting for display ads are running into.

Source: TechCrunch.com

Local online video ad revenues will hit $1.5 billion by 2012, up from $11 million in 2007, according to The Kelsey Group’s “US Local Video Forecast (2007-2012)” report.”Publisher sales channels put Internet Yellow Pages in the strongest position to benefit from SMB [small and medium-sized businesses] and user demand for local online video,” said Matt Booth, senior vice president at The Kelsey Group, in a statement.

eMarketer senior analyst David Hallerman said that service providers were making it easier for smaller businesses to create video commercials and place them on local media. He also said that local media such as TV stations and newspapers were offering more online video content to support such local advertising.

“Up to now, the traditional publishing platform for local online video advertising growth has come more from newspaper sites than TV station sites,” Mr. Hallerman noted. “However, as TV stations built up their Web sites, their ability to cross-sell video ads to SMBs on both media will likely give them an advantage.”

Online video ad spending is growing in part from the large number of Internet users who now watch videos online—an audience eMarketer predicts will grow to 190 million in 2012.

More than six out of 10 consumers surveyed by The Kelsey Group in March 2008 said they had seen an online video ad.

Source: eMarketer.com

The local online video advertising market in the United States will reach $1.5 billion by 2012, according to a report released this week.

Researchers predict that consumer adoption and conversion rates will drive small to medium-sized businesses to spend 11.6% of their online budgets on video ads by 2012. Video production companies and Yellow Pages publishers represent growing market segments that will present considerable opportunity for expanding local video ads, the company said in its U.S. Local Video Forecast (2007-2012).

“Publisher sales channels put Internet Yellow Pages in the strongest position to benefit from SMB and user demand for local online video,” Matt Booth, senior VP and program director for The Kelsey Group’s Interactive Local Media practice, said in a statement. “At the same time, local video growth will hinge upon [Internet Yellow Pages’] execution of sales and video networks’ distributed production and fulfillment.”

The Kelsey Group said that 62% of consumers surveyed in its User’s View Study in March reported watching online video ads, compared with 59% in 2007. More than 47% of consumers who watched an online video ad visited a Web site, and 19.1% sought information about a product or service. More than 18% visited a store to see a product, and nearly 17% of those who watched an online video ad bought something.

 

Online advertising is everywhere. Avoiding them often means resorting to popup blockers and spam filters. But with the rise in popularity of online video, ducking the deluge of ads is becoming more difficult.