Solving the Online Video Ad Puzzle

A new report from Screen Digest puts a nice point on the puzzle faced by companies trying to run ads alongside videos on YouTube, et al. In essence, there is lots of ad money out there, but it’s taking its sweet time about gravitating to online video:

The user generated online video market (UGOV) exploded in 2006 and by
the end of the year, user generated videos made up 47% of the total
online video market in the US. By 2010 more than half (55%) of all the
video content consumed online in the US will be user generated,
representing 44 billion video streams.

Although accounting for more than half of all online video content
consumed – user generated videos will make up just 15% of total
revenues. These are the latest findings from Screen Digest, the media
analyst firm, which today releases its latest report on the UGOV

Screen Digest believes that advertising will be the principal source of
revenue for UGOV sites. In the US ad revenues will grow from $200m in
2006 to almost $900m by 2010. This represents only 15% of all online
video revenues.