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A new white paper was released today by The Kelsey Group that looks at recent trends in online video use and advertising. This is a trend we’ve also covered in previous posts, and it was a big theme at the recent Drilling Down on Local ’07 Conference in March.

The point is that a video revolution is brewing. Thanks in part to the awareness and popularity YouTube has brought to the medium, online video is reaching mainstream levels. Business models meanwhile continue to be developed and heavily funded to meet this demand in new ways.

This has all more recently reached a local level with an ecosystem beginning to form around the production and automated distribution of video advertising for small businesses. In local, the dynamics will be emblematic of the larger online video space and will come with their own set of unique opportunities and challenges. This opportunity was most recently realized by Citysearch, in its local video ad integration; and it remains for many Internet Yellow Pages companies.

Content generation, distribution, search and monetization all represent big question marks in the embryonic market sector, and we are seeing lots of experimentation on all these fronts. The white paper is available to clients of the Interactive Local Media program (sub req.) and the executive summary is publicly available here.

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