According to a September report, internet video ads were found to be more than 27 times more effective at reaching consumers than standard banner ads and more than 12 times more effective than rich media advertising during the first six months of 2012.

The study looked at the click-through rates from more than 3 billion ad impressions, finding that interactive online video ads were 10 percent more effective than rich media ads that included video. From April to June of this year, internet video advertising had an average click-through rate of more than 3 percent. During the second quarter of 2011, video ads has a CTR of less than 1 percent, BtoB Magazine reported.

"As online video formats become more mainstream, the marketer will be free to focus on simply adjusting their video creative for any platform – TV, online or mobile," Ricky Liversidge, a marketing professional, said in a release. "This global benchmarking from such a massive volume of impressions is tangible evidence that consumers are keen to engage with brands via online video content."

In addition, a Nielsen study from April showed that online video ads were deemed to be more trustworthy by consumers worldwide than website banner advertisements. Internet video continues to gain traction as a marketing channel, according to a comScore report from April. The report found that 181 million Americans had watched more than 8 billion internet video ads in March 2012. The average viewer saw more than 53 online video ads in the month, with video advertisers reaching more than 51 percent of the U.S. population.

Why video ads are better than display ads
While display banner advertising was once the premier format for brands to reach consumers online, now that distinction goes to video, iWidgets CEO Peter Yared wrote in a 2009 AdWeek article.

He compared the difference between the two mediums to billboards and television spots. Billboards are only effective when located in well-trafficked locations like New York City's Times square, and rarely is a billboard's call to action effective. A banner ad is similar in that it is only effective when placed on well-trafficked websites, and even then it rarely yields a significant amount of clicks.

In contrast to billboards and display ads are video spots, according to Yared. Video is more engaging than static ads, and the spots are more likely to be seen by a greater number of people thanks to social media. Unlike static banner spots, lively videos can have even greater reach when consumers share the ad on popular social networking sites like Facebook. This is actually more beneficial than traditional television ads, as it illustrates a new proactivity on the part of the consumer to view an ad and to interact more with it.

"By and large, advertisers are missing the boat when it comes to using digital ads for branding," branding expert Gilad de Vries wrote in a May 2012 article for Forbes's CIO Network. "Far too many dollars are flowing into display ads, which are incredibly weak branding vehicles. You can add all the bells and whistles you want to banner ads, but they’ll never truly create the kind of emotional experience that gets consumers excited about your brand."

A big key in regard to internet video advertising, according to Yared, is that brands have to understand that the online video space is for more than just amateur video content posted on YouTube. More high quality media is moving online, from traditional TV content made by companies like CBS and Fox to web-only videos made by high-profile sites like funnyordie.com. Just as TV ad dollars followed television content, so too should more focus be put upon internet video advertising.