Online video has grown by leaps and bounds, but marketers are still trying to figure out how best to exploit it - with video ad spend constituting merely 0.6 percent of TV ad budgets this year, though the online audience for it is about two-thirds the size of TV, David Hallerman, senior analyst at eMarketer, points out.

What online video marketing models will succeed may not yet be clear, but the currently dominant pre-roll approach is likely not the best answer in the long term, writes ClickZ citing speakers at Ad:Tech in New York last week. More than 90 percent of pre-roll inventory has been typically sold out at any given time this year, and it will likely stay so for a while as marketers simply run their TV spots as pre-roll ads.

They do so, because it's the path of least resistance toward transitioning online, which is what major marketers finally want to do, according to Janet Balis, SVP of sales development for AOL Media Networks. She says savvier marketers are to more gracefully integrate brand into online content via product placement and sponsorships.

Google is also looking for alternatives to pre-roll and has instead tested persistent branding ads above the video content and 15-second post-roll ads, according to Daniel Blackman, strategic partner for development at Google Video.

Citing the success of contextual text ads, he says "users respond to less intrusive, more relevant, targeted ads," and the challenge is to apply a similar approach to online video.