• by Laurie Petersen , July 26, 2007

Online video ad spending will register its greatest year-over-year growth in 2007--rising 89% to $775 million, forecasts eMarketer. Even more significant, the researcher says, the growth rate will remain near or above 40% through 2011, when video ad spending will reach $4.3 billion.

Next year will be a watershed for online video as more than 50% of the U.S. population--155.2 million people--will be watching it, eMarketer forecasts.

How the audience reacts will ultimately shape the format.

Yet even by 2011, the amount of time spent watching video online will be more significant than the ad dollars spent.

"As marketers and Web publishers look for ways to expand video's place in the online advertising universe, two key concerns will keep growth below expectations," said David Hallerman, senior analyst and author of the new "Video Advertising Online: Spending and Audience."

One concern, he said, is uncertainty about what the audience will accept in terms of video ad content, placement and length. The other concern is the difficulty in gathering enough video ad inventory, with questions about ad placement and how to monetize the billions of user-generated video streams.