• Marketwatch, Wednesday, February 28, 2007 10:45 AM

Local video advertising will soon become a reality, as the Web brings down the cost of producing video, while providing marketers with better-targeted audiences. But the effective deployment of video for local merchants could be years away.

Remember, we talked about media convergence for nearly seven years before it became a reality. The same could be true with online video, especially as a jittery world market stares down the barrel of an economic correction. As an ad technique, video holds tremendous promise, but it's still only a blip in online spending, and tiny in the overall ad market. Moreover, local advertising traditionally lag behind national brands in adopting new techniques.

The opposing argument says that online video is even better-suited for local advertisers because audiences are naturally smaller and more targeted. If local merchants can buy contextually relevant video on Yellow Pages Web sites, and providers like Spotzer, which aims to bring video services to local merchants, make the buying process easy and cost-effective, adoption could be faster than expected. Local merchants have been stonewalled for years by high-priced TV ads; lower-cost online video could prove to be the answer for them. The question is when.

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