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Online video advertising is still taking its baby steps. Big display ad networks like Ask.com have added video support to their banner ad networks, while startups Tremor Media, VideoEgg and Brightroll launched as straight-up video networks. Company strategies stretch across a wide range. Freewheel is a technology platform, while Brightroll focuses on being an ad sales network.

YuMe, a well-funded company founded in 2004 in San Francisco, combines what co-founder Jayant Kadambi described on a phone call as “a technology platform with a media sales team on top of it,” in the style of the original DoubleClick ad network of the 1990s. YuMe will not only provide the technology to serve video ads to your site, it’ll actually sell the ads for you, and give you a cut of the proceeds. “Instead of going to publishers and saying, ‘pay me $10,000 up front to use my technology,’” Kadambi said, “we can go in there and start writing checks to them.”

Today, YuMe launched a new video ad feature the company calls Triple Play. Think about how at the end of a YouTube video, you’re given the option to do several different things — play the video, play another video, share the video. Triple Play adds that sort of functionality to the end of a pre-roll ad that runs before the main video in an embedded Flash player. See the demo Triple Play ad in YuMe’s ad gallery. It begins with a 12-second ad for the Pulse Smartpen. At the end of the ad, there’s an onscreen menu with three options: Watch a full-length video about the Pulse, go to Pulse’s Facebook page, or go to Pulse’s website.

Oh yeah: There’s also a link at the bottom: “Continue to Content.”

I’m sure many people who find themselves agitated by advertisements — I’m one of them — will seethe in silence when instead of proceeding to the video they wanted to watch, the ad stops and puts up a menu of more calls to action. But it’s also a pet frustration of mine that when I do find an ad interesting, it’s suddenly over and I can’t get it back. Triple Play could help — it could let me play the ad again, or pop open a new tab with the product’s home page, or tweet me a link to look at later. “Basically anything you can code into a Flash file,” Kadambi said. The most obvious call to action might be to get a viewer’s ZIP code or email address for more targeted information.

Will this make YuMe more money? It seems likely. Video ad rates can be as high as $80 for 1,000 served ads, or as low as a few cents for a thousand. Triple Play gets to the point that what advertisers really want from online viewers is for them to “lean in” and interact with the ad, rather than leaning back and watching it go by. Triple Play pretty much forces you to engage.

YuMe, which has 40 employees in Redwood City and another 40 in India, is backed by Khosla Ventures, Accel Partners, BV Capital and DAG Ventures. The company has raised $21 million in three rounds, most recently a $5 investment in September 2009.

iVdopia, a video-based mobile ad network for the iPhone, has just added social features to mobile ads. Its new Talk2Me ads can be shared via Facebook and Twitter and offer various methods of response (call, SMS, email) and interaction. Ads like this that are specifically designed to be shared, in line with how we share Youtube videos or articles, are a pretty recent development.

For example, a soft drinks company has created a video ad for a Facebook facial profiling application that matches a photo of the user with other users who look like him or her. This has a strong viral aspect and users can share the ad directly via Facebook or Twitter.

According to iVdopia co-founder Srikanth Kakani, the campaigns that do best are the ones that embed social features. “People don’t buy stuff yet on mobile. They do a lot more than before, but we think the best way to capture people via mobile advertising is to get them to perform smaller actions, like becoming fans of Facebook sites or tweeting on Twitter.” Going viral is more important for lower-cost consumer products. A car brand might spend $1,000 to acquire a single customer. Consumer brands like Coke have to spend less money per customer, which makes the viral aspect more important. “Basically, you spend some money and it has to stick,” he said.

iVdopia, which currently reaches 30-40% of iPhone users in the US, previously introduced the clever idea of pre-app ads, which are served while an application downloads. The annoying thing about most advertising is that it interrupts an experience. Users are likely to be much more receptive to advertising which fills “dead time” like downloading. Pre-app ads remind me of an ad feature from the TV world where a banner ad is shown while a video is paused.

I asked Srikanth and COO Chhavi Upadhyay about the most effective ways to get consumers to respond to and interact with video ads. “Online, we have had a really good response with users filling out forms with the video ads. That has been very cost effective in the sense that it generates more leads than any other ad format. With mobile, we expect sharing to be much more popular,” said Srikanth.

iVdopia contends that the most important thing an advertiser can know is how consumers are reacting to a brand. Upadhyay adds, “Hulu has interactive ads where, for example, they show a video of a car, they give the user the choice to watch something about the car’s bumper design or about its interior. The interactivity lets them understand what people really want to look at. And they found that after looking at the video, people actually looked at the web site.” Feedback that comes from the advertisement itself is very useful, since it lets advertisers tailor ads to showcase the right aspect of the product to the right user.

In the future, Srikanth expects social advertising to become very powerful. He also forsees a major shift in advertising spend from TV to mobile.

iVdopia has offices in San Jose, Calif., and Gurgaon and Mumbai, India. It raised $4.7M in funding last year from Nexus Venture Partners.

Josh Warner is president and founder of Feed Company, which promotes and distributes brand videos, including campaigns such as Levi’s “Backflip,” Ray-Ban’s “Catch” and Activision’s “Bike Hero.” In three years, Feed has seeded more than 100 videos across the social web.

2009’s crop of top viral video advertisements show us that people are willing to embrace a host of creative approaches on the social video Web, from beguiling mini-films, to user-generated advocacy, to YouTube celebrity endorsers, to elaborate commercial-grade productions. That’s good news for creators.

Regardless of the approach, the key for marketers is a solid understanding of what a brand is, who is the brand’s audience, and what moves them. Strangely enough, this formula sounds like traditional advertising. This year’s Top 10 is certainly a glimpse of how the viral video ad business is evolving, and as marketers, what we can learn from that evolution.

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1. Inspired Bicycles

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Advertiser: Inspired Bicycles
Ad Agency: N/A

Why it works: Inspired Bicycles’ team rider Danny MacAskill scales fences in and around Edinburgh, Scotland. The video is as mesmerizing as its hypnotic soundtrack from music group Band of Horses. It’s a solid example of how a brand pursuing a niche market – mountain bike trailblazers – can reach the masses with a brilliant viral video execution.

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2. SIGNS

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Advertiser: Schweppes
Ad Agency: Publicis Mojo and @RadicalMedia

Why it works: A love story with few words, Signs compels you to watch until its poignant end. It conclusively dispels the myth that viral video executions must be short and gimmicky to grab your attention.

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3. Piano Stairs

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Advertiser: Volkswagen
Ad Agency: DDB Stockholm

Why it works: “Take the stairs instead of the escalator and feel better” is something we hear but didn’t often see until this sly video from Volkswagen appeared on the Web. It’s part of an inspiring campaign, The Fun Theory, that encourages people to come up with fun ways to “do good.” The video itself did well indeed, imbuing Volkswagen with a fun new ethos and racking up millions of views in the process.

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4. BooneOakley.com

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Advertiser: Boone Oakley
Ad Agency: Boone Oakley

Why it works: Boone Oakley, an ad agency from Charlotte, North Carolina, uses an interactive YouTube video to tell its story and showcase client work. Audacious and attention-getting, it puts the young company on the short list of ad agencies who get it.

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5. Hosting Your Party

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Advertiser: Microsoft
Ad Agency: N/A

Why it works: This is the ultimate anti-viral: a video that generates millions of views simply because of how profoundly it misses the mark. Comments have been disabled, but all you have to do is talk to someone you know who’s watched it to know why it was so generously passed around.

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6. YouTube HD Camera Trick Challenge

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Advertiser: Samsung
Ad Agency: Viral Factory

Why it works: One cunning way to get people talking about and sharing your video is to make them wonder how you shot it in the first place. Samsung went to great lengths to protect the “trick” in the video for their new HD camera phone, which got tech geeks riled up to try solving the puzzle. Geeks happen to be the audience most likely to buy the HD new camera phone, which is why this video makes our Top 10.

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7. United Breaks Guitars

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Advertiser: Dave Carroll
Ad Agency: N/A

Why it works: A traumatic experience for one flyer becomes a public relations disaster for United Airlines, when musician Dave Carroll uses a YouTube video to vent frustrations after his guitar is damaged at Chicago O’Hare airport. The takeaway: Viral video is a wonderful tool for consumer advocacy because chances are you’re not the only one who is upset. In this case, United was inundated with additional complaints after United Breaks Guitars.

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8. All the Single Babies

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Advertiser: singlebabies.com
Ad Agency: User Generated

Why it works: The huge popularity of this video, a baby dancing to a Beyonce song, is channeling ad revenue and donations into his college fund. This quick reaction to a YouTube hit shows us the toddler’s dad has moves of his own — something sluggish advertisers can learn from.

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9. Guy Catches Laptop with His Butt

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Advertiser: MSI Computers
Ad Agency: N/A

Why it works: In much the way Airplane parodies disaster films, this cheeseball video spoofs last year’s viral video hit Ray-Ban’s Guy Catches Glasses with Face. The inside joke is why we picked the video for this year’s Top 10. If you’re not on the web, you don’t get it. But for the millions who saw Ray-Ban’s video, it’s a wink and a nod, and an ironic sign that the viral video medium is maturing (or not).

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10. JK Wedding Dance

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Advertiser: Jill Peterson and Kevin Heinz
Ad Agency: N/A

Why it works: A couple’s wedding entourage dances down the aisle to Chris Brown’s song “Forever,” springboarding this video into viral history (at least for ‘09). Instead of stripping the video of its music — something copyright owners are permitted to do on YouTube — Sony used its popularity to sell more Chris Brown albums

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More video resources from Mashable:

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- 5 Best YouTube Sports Moments of 2009
- Top 10 Video Sharing Sites Judged by Mashable Readers
- 5 Important Web Video Lessons for Small Business Owners
- 7 of the Most Inspiring Videos on the Web
- Top 10 Dancing Babies on YouTube

Image courtesy of iStockphoto, fotoIE

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Reviews: YouTube, beyonce, chris brown, iStockphoto

Tags: advertising, video, viral videos, youtube

Video ads on the iPhone are about to get a lot more like video ads on the Web: highly interactive and hard to just skip over. AdMob, the company that Google just announced it was buying for $750 million, has launched an interactive video format for ads running on the Apple device.

Much like some of the more complex campaigns you now see on sites like YouTube and MySpace, the ads let users watch video and perform a number of actions, like view additional videos, learn more about the ad, or respond directly, like by buying an app.

The ads load before an app starts. In the example provided by AdMob, the game Tap Tap Revenge is preceded by an ad for Madden ’10 by Electronic Arts. According to the company, the ads are optimized based on your connection, so you’ll likely get a higher quality streaming ad if you’re on 3G as opposed to EDGE.

Overall, it’s certainly not the least invasive ad format we’ve seen, though it follows trends we’re seeing on the Web with ads becoming bigger and harder to avoid. On the other hand, at least they’re adding interactive components that make the ads more engaging than a straight up commercial.

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Reviews: MySpace, Tap Tap Revenge, YouTube

Tags: admob, advertising, Google, iphone, Mobile 2.0

Today at the Web 2.0 Summit in San Francisco, Facebook Chief Operating Officer Sheryl Sandberg took the stage. She sat down for a Q&A with Federated Media’s John Battelle to discuss Facebook’s deal with Bing, its long-term goals, advertising, Facebook Connect, and more.

While there were no bombshells during the Q&A, it was still an interesting discussion, and she did release an interesting stat: there are now over 45 million status update per day from 30 million unique visitors.

Here are the highlights:

On Bing: Sheryl noted the search deal with Bing, saying that it will be integrating Facebook data into Bing sometime soon. They are giving a stream of their data to Bing. No money exchanged hands. She also said there is no Google deal in the works currently.

On advertising: She discussed innovation in advertising. In the past, ads were one-to-many (banner ads, video ads). On Facebook, they are “engagement ads.” Specifically she said that you can engage with brands just like you would with your friends, making it a more meaningful advertising experience.

On search: Sheryl, a former executive of Google, addressed whether Google should be worried about the fundamental shift of the “information economy” to the “social economy.” She said that Facebook believes in the “wisdom of friends” over even the wisdom of the web. She believes Facebook is uniquely positioned to fill this gap and provide information nobody else can.

On Facebook’s relationship with 3rd party developers: They focus on the core technology, and let developers focus on the specifics. They care most about being the technology that connects everyone.

On Facebook Connect: She was asked by John Battelle if Facebook Connect has evolved as she expected. She simply said that it has enabled people to connect to the Facebook platform in completely new ways. Their goal is simply to facilitate sharing. Specifically though, they’re looking to make it easier to use Facebook Connect. They are not focusing on monetizing Connect at this time.

On Facebook Credits: The long-fabled monetization strategy of Facebook…Sheryl was completely tight-lipped about. It’s still being tested with developers.

On Twitter: We’ve discussed Facebook’s Twitterification before (adding real-time search, making the home page stream-like, etc.), but John asked Sheryl about this directly. She praised Twitter as being “impressive.” She called it part of a “global movement” changing how we communicate.

On status updates: Sheryl announced that Facebook processes 45 million status updates per day.

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Reviews: Bing, Facebook, Google, Twitter

Tags: facebook, Sheryl Sanberg