With all of the traffic online companies are rushing to reach web browsers through online video advertising. But, many people are wondering if these ads are even effective.

Last year a Doubleclick survey showed that these ads do in fact work – with 8% of those surveyed interacting with video ads. They also found that users are much more likely to watch a video repeatedly than they are to click on a traditional banner ad. For those that may wonder how long the videos are watched, Doubleclick found that the average viewing time was around two-thirds of the way through.

The main measure for the effectiveness of video ads is simply their interaction rate. Anytime people interact with the video ad units, including expansions, interactions with the video control button, and custom interactions and clicks it is divided by the total impressions served and calculated to determine interaction.

Video ads have three primary formats. The first is really similar to TV advertising – 15 or 30 second spots that run either before (pre-roll), during (mid-roll) or after (post-roll) the online video. The next type of video ad is known as overlays. These are generally displayed along the bottom of a video as it plays. YouTube tends to favor this kind of advertising, as a video is still viewable while the ad is being shown. The final format is Google’s Video Units, which simply take the AdSense format and apply it to videos.

Even though the current methods of video ads seem to be working well many fear that it will eventually fall by the wayside much like banner ads. And so new ideas are always being considered.

One idea for future formats of video ads include lead generation for video. For instance requiring someone to enter an email before they can watch a video. Another idea is an interactive pre/mid/post rolls that engage the user to a higher level. A third idea is clickable videos that lead from the ad to relevant content. For example, if you were watching one of your favorite shows and you could click on the shirt the main star was wearing to find out where it came from, then you could go buy it as well.