For those companies which find television advertising too costly, there’s an alternative — online video advertising. It may not have the reach of TV just yet, but it’s an area growing fast.

Video advertising is done on websites that have video content. The ads play for a short time before the video starts and after it ends. Slogan ads may also be shown at the bottom or top while the video is playing.

In India, there are only a few companies that power online video advertising — Vdopia, Jivox and Komli.

“Creating a television ad can be an expensive affair. Online video charges for complete viewing. It can go upto 45 seconds at no extra cost,” says Dinker Charak, director of application engineering and partnership at Jivox, a company that has placed video ads for brands like Nokia, LG and, Maruti. Moreover, there’s feedback mechanism online to show whether a internet user ran the ad to its full length. The typical cost to advertisers is between 40 paise and one rupee per complete viewing, says Charak.

“On television, advertisers are paying a bulk fee, while the charges in online video advertising are based on spot cost. Earlier they (advertisers) used to spend really big on television, but now because of the slowdown they are cutting back and keeping track of every penny spent,” says Saurabh Bhatia, managing director, India, of California-headquartered Vdopia Inc. The company claims to have 80-85 per cent of the market share of all online video ads in the country. Bhatia says the past six months had been the best for the company as revenues have grown by 150 per cent each quarter.

Bhatia says the size of the total online ad market in India was around 500 crores in 2008 of which the video ad market was around Rs 60 crore and growing at 300 per cent a year.

“Video advertising is being seen more of an heir-apparent to television ads. The future can be expected to include online video ads as a key component of any campaign that wants to be effective,” says Charak. As with most people marketing a product or service, he believes online is the place to be in. Quoting an Ernst & Young study, he says these ads gives 80 per cent ‘better brand recall’ as compared to television, which give only a 50 per cent recall. “Every 10th person would tend to view a normal online banner ad whilst surfing, whereas for a video ad the number is 99 out of 100,”

he adds.