Guys like Todd Herman at MSN, George Stewart at Yahoo!, and Tom Bosco at AOL are quickly positioning their organizations to offer up the potential of the fifth network along with a slew of other affiliates like ESPN and iFilm to name a few.
While the optimist in me likes to think we are well on the way to the fifth network getting is share of the media mix, the realist knows that there are problems that we must fix first with in stream advertising to make it powerful and scalable to the level of its more mature in banner brother.
Among the challenges the online video industry needs to address with regards to in stream advertising are: limited content, limited inventory, no ad management, no frequency control, no inventory forecasting/volume control, and too many multiple video players. That seems like an insurmountable list, but in many areas progress is rapid. For example, video content is growing from a combination of repurposed TV video and original video shot expressly for Web audiences. We still need more and will see it as the viral effect continues. That effect? A video clip seen once on CNN was accessed 5 million times online.
Right now, big brand advertisers can't scale their messages across the vastness of the Internet audience because many early-adopters have instituted video player systems that are specific to their networks or sites. If we are to attract advertisers looking for vast online reach and frequency we can't block the road by asking them to encode their video differently to meet the specs of many different video players. A single and industry standard video code would enable us to provide users with a universal tag so we can track who is watching what, where, and for how long. We can then also control reach and frequency, enable more precise ad targeting, provide ad rotation, and even optimize for connection speed.
What this industry needs is an 'open' ad delivery/management protocol so that a streaming video spot (or simple Flash ad) can play within any player and optimize size and display quality based on user player dynamics.
I'm not sure what the magic technical solution is, but once in stream becomes part of the mainstream ad inventory delivery/management process for publishers, usage will rise as will demand for streaming video content, especially among portals with high concentration of broadband and at-work users.