Online video advertising is seeing rapid growth at the moment, with spending increasing by 83% from last year, according to eMarketer.

US online video ad spending will reach $410 million this year, compared with around $74 million in 2005, says the US-based firm. Spending is predicted to rise to almost $3 billion by 2010.

Such rapid growth is fuelled by the massive popularity of online video sharing sites, which have created a massive online audience for advertisers to target. Some see Google’s recent acquisition of YouTube as a vote of confidence in video advertising.

While the growth is impressive, online video advertising still only accounts for around 2.6% of online ad spending and, though this is predicted to rise to 11.5% by 2010, other advertising techniques will continue to dominate.

Additionally, there are barriers to further growth in online video advertising – comparatively high production costs, as well as the problem of how to keep customer engaged with the adverts. 

A recent study by Forrester Research showed that 80% found online advertising inserted into video content annoying, and the majority of those ignored it.