• Forbes.com, Monday, February 26, 2007 10:45 AM

The Web video advertising conundrum: marketers want to get in front of consumers watching video, but no one wants to be forced to watch ads. Consumers simply don't have the patience to sit through a 15-second pre-roll -- not when they can open a new browser or find something else to keep them occupied. Google, the Web advertising behemoth, hasn't even tried running video ads yet.

A new approach is to combine ads and video clips. Addicting Clips, part of Viacom's Atom Entertainment, placed a simple sponsor button for T-Mobile on clips for a contest Atom held with the wireless carrier. San Francisco Web firm Videoegg sells a clickable overlay called a "ticker" as well as an "endcap," offering a variety of clickable options at the end of a video clip. Last year, Videoegg ran such a promotion for Fox's "The O.C."

The most recent eMarketer report pegs Web video spending at $775 million this year, an increase of 89% over 2006, but still only about 4% of the projected $19.5 billion online ad market. One of the big problems is reach. Video ads simply aren't worth it to advertisers, as the wide variety of video formats prohibits campaigns from being run broadly. Copyright concerns are still a major issue. The industry needs increased standardization and consolidation to fix these problems.

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