As video ad consumption soars, so do marketers’ video budgets.

There are more than 785m visits to online video websites in the UK each month. Spending on online video advertising in the UK hit 109m in 2011, more than double the previous year.

And the mind-blowing numbers keep coming – comScore’s May estimates for U.S. video views topped 10 billion for the very first time.

But when will the digital ad industry rise to the challenge?

Right now, brands that want to capture online audiences have few options and the benefits from pursuing them are limited. For the most part, video-ad targeting remains primitive, the resulting metrics are inadequate and brand safety is rarely assured. Marketers often fail to look beyond pre- and mid-roll, which bring their own constraints, and consumers barely even register on most brands’ lists of strategic priorities.

If we as an industry want to create video advertising that truly delivers on its promise – bringing together the best of television and digital to engage consumers in entirely new ways – we need to shift gears, and soon.

We must not focus simply on basic execution issues like placement, positioning and pricing. We also need to improve on the targeting, accountability and brand safety fronts. Finally, we need to consider the consumer in a new, more thoughtful way.

Smarter targeting

First, we need to help the brands and agencies we support reach the audiences they need. Display brand advertising works best when it’s contextually relevant to the content of a page, and the same goes for video advertising. Until we can offer video ad targeting that leverages the full breadth of digital data and its environment, we’re selling ourselves short.

Reconsidering ROI

Brands and their agencies love digital for the belief that they can track all aspects of performance; with online advertising we can measure to our hearts’ content. However with pre-roll – the lion’s share of video advertising – the numbers we get are typically completion rates and CTRs, confusing and often contradictory measurements that reveal nothing about ad effectiveness or user engagement.

We should be able to tell advertisers how long a user was engaged (not because they were forced to!) watching a video, what they did afterwards, whether they shared the ad and what the impact was.

The scale vs. quality dilemma

To look at those soaring video-consumption numbers, you’d think quality inventory was bottomless. On the contrary: One reason video might well continue to lag behind television is the impossibility of competing with the latter’s scale.

With video, brands face a difficult decision: Should we go for reach and compromise quality, or sacrifice scale to protect our brand? Until now, there’s been lots of demand for premium video advertising, but not enough premium content to fulfill the requirement of pre- and mid-roll execution.

For video to realise its potential, the industry needs to make a more concerted effort to respond to the needs of agencies and marketers, either by looking to new channels for content or by thinking more broadly about how to reach audiences in the right environment with video.

In part, this is about analytics keeping pace with technology. For example, until reporting agencies like comScore broaden their definition of “video network” – which still dates to the era of embedded video players – to accommodate new delivery platforms, agencies and advertisers won’t understand the full range of solutions at their disposal.

Putting consumers in the picture

Finally and most importantly, the industry needs to pivot 180 degrees to put user experience at the center of every video campaign. With our consumer hats on, we need to consider the “value exchange” of video advertising. Brands need to look closely at what they offer users in return for their time and attention. And they need to think anew about what people want, to create advertising in the interest of the consumer.

In our recent Dynamic Logic study, we looked at how the user experience of a video ad impacts brand engagement. There were 500 participants involved and the key findings were that, first, the ability to both choose and control the online video experience matters to users; and second, personally relevant ads aligned to content are more likely to engage and hold a user’s attention.

Specifically, 81 percent of survey respondents reported that they prefer advertising they can initiate on their own. Seventy-two percent appreciated being able to start and stop an ad on their own. And 62 percent said video ads that were relevant to the content on their page left them with a more favorable brand impression.

The sooner that we as an industry can prioritise these four issues, the sooner we’ll arrive at a video solution that delivers great results for brands, publishers and – most importantly – consumers.