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Are online video ads effective?

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A recent survey of people’s attitudes toward online in-stream video advertising suggests that advertisers using this increasingly popular form of Internet marketing are wasting their money.

Half of all respondents said they stopped watching online videos once they encountered in-stream advertisements, and nearly one in six said they immediately left the web site, according to results of the survey released Monday by Burst Media, an online advertising network.

“In-stream video is not getting the benefit advertisers hoped,” said David Cooperstein, chief marketing officer for Burst. “People are expecting the content—not to be interrupted by an ad.”

Web publishers increasingly are adding online video content to their sites, as the technology for creating and posting it has become cheaper and as more web surfers are connected via broadband. The Burst survey—which polled 2,600 web users 18 years or older—found that nearly 70 percent of respondents have viewed online video, including more than half of respondents 65 years or older.

Advertisers haven’t been far behind this surge in online video. eMarketer estimated that U.S. Internet video advertising—including in-page and in-stream—will reach $3.1 billion by 2010 from $775 million in 2007.

The Burst findings cast doubt on the effectiveness of in-stream advertising, in which a commercial interrupts streaming video, either before, during or after it has begun.

Mr. Cooperstein said advertisers should use shorter commercials—from 5 to 10 seconds long rather than 15 to 30 seconds like on TV—and they should be matched to the content of the video interrupted.

An in-stream ad placed at the beginning of a skiing video, for example, should be related to the sport.

Some advertisers also have had success with overlaying their commercials in the corner of the video screen so the user could still see the video, said Mr. Cooperstein. Other advertisers have experimented with displaying their commercials in separate screens just to the side of the video.

If in-stream commercials don’t change, consumers have shown they’re willingness to click away.

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