Nearly six in 10 adult consumers say they watch online video, according to the Kelsey Group's "Online Video: A New Local Advertising Paradigm" report. More than half of adult consumers also do something in response to watching the video, such as visiting a Website, going to a physical location or making a purchase.
The report states that the high level of consumer activity in response to online video makes it a good medium for small businesses, especially compared with some other forms of online performance-based marketing such as pay-per-click.
Michael Boland of the Kelsey Group said, "YouTube has largely popularized the concept of watching short videos on a computer screen and has likewise familiarized consumers with the idea of watching short video ads.
"A wide range of business models are coming to market in the hopes of tapping into the growing demand for video. We are in a 'wild west' phase of experimentation on all fronts — content generation, licensing, search and monetization."