Online video analysts offer very different predictions for total growth in revenue over the next five years, but they almost all agree that the market will grow exponentially. According to an E-Marketer report released today, online advertising spending is expected to increase tenfold by 2013. The report estimates that by 2012, 62 percent of the U.S. population and 88 percent of the internet audience will view an online video at least once a month, validating the rapid expansion of ad expenditure in this area.

In a July 2008 report, the Diffusion Group estimated that the strongest ad growth will come from short-clip and long-form videos, which will employ a mix of pre and post-roll, overlay, and new interstitial and pause ads to reach the burgeoning consumer base. The report estimates that there will be four times as many total video streams within five years, increasing from 126 million presently to 559 million in 2013. But the report expects even swifter growth specifically from short-clip and long form streams, 500 percent and 700 percent respectively. 

The question remains for the best way to monetize the explosion of content and viewership, but most industry analysts foresee an exciting and dynamic future for revenue production in online video. The Diffusion report projects a whopping 17-fold increase in annual online video ad revenue by 2013, with growth from $590 million in 2008 to nearly $10 billion in 2013. The E-Marketer report is more conservative, predicting total annual video ad revenue of nearly $6 billion in 2013.

Factors influencing the respective predictions included economic conditions, audience tolerance of various ad methods and advertiser adoption of online video buys. 

For more:
- read the full E-Marketer report [1]

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Interesting take on mobile vs. online video ads [2]
Another Diffusion prediction [3]