Despite this gloomy IDC report (AdAge) about online-advertising contracting, online video will flourish. And I’m not the only guy who thinks so.

IDC’s director for digital media and entertainment, Karsten Weide, tells AdAge that online advertising spending will be soft the first half of 2009 (but online advertising will do better than the economy at large). Weide says video is currently “enjoying the high ground,” especially as use increases.

“People are accessing video services not just on their PCs, but increasingly in the living room,” he said. “That is really where it’s at.”

Now the IDC tends to focus on ad spend that it can measure, and that includes things like display ads besides video, overlay ads (pop-up over bottom 20%), and those satanic pre-rolls.  What it doesn’t always include is the big content deals between brands and media properties that don’t run through agencies or media buyers. Daisy Whitney has pointed this out before.

There’s also another aspect of online-video that is often missed: Revenue for content creators & online-video “stars” that aren’t really advertising… sponsorships, custom content, product placement, and the like. If you include video production that is deployed online (and you shouldn’t), the online-video share of ad dollars is far higher.

I like a booms or a busts because they favor innovation. A boom means lots of experimental spending. A bust means dollars move to stupid vehicles to higher impact and targeted vehicles, and online video only needs one thing this year...

Online-video needs to demonstrate business value beyond awareness (reach/frequency) and direct response (and it’s a crappy vehicle for the latter). That means I hope to see Dynamic Logic and Insight Express surveys (surveys comparing test versus control) that show the impact of online-video on attitude, intent and purchase behavior. And I want them nowwwww!!!! People?

Here’s why online-video gets a crappy rap. It’s often compared to the CPM of display ads. That’s like comparing a grocery flier to good advice from a friend. Online-video is getting exponentially more attention (as defined by awareness of the actual content), and often the context gives it an additional credibility boost. If my favorite online-video star endorses a product, it’s more meaningful — I trust you’ll agree — than an ad alone.

So let’s get those studies going, people. You want free content “on demand” from your couch? You gotta show marketers this works.