While the advertising industry scrambles to come up with viable options for taking advantage of the explosive growth of online video, one company is taking a unique approach that may set a trend.  According to ClickZ, Pulse 360 has developed a system for deploying targeted, relevant text ads inside the video player window.  At the same time, TVEyes has developed a different system that indexes audio and video and uses the indexed information to deliver targeted text ads alongside video clips.

The video advertising system, which uses metadata supplied by the publisher to determine the ads to be displayed, can target users based on context, geography, demographics, or behavior.  The selected ads (usually one or two) are shown as a post roll clip and dynamically selected.  As with other Pulse 360 ads, the video text ads will be sold on CPC basis.

On the other hand, the TVEyes solution involves a scanning technology that attempts to extract context information from audio and video.  The indexed contextual information is then used to selected the text ads.  Unlike the Pulse 360 system, TVEye's ads appear around the video player in the surrounding website.  The scanning technology could potentially resolve a possible exploitation of Pulse 360's system.  I could create a video about bananas and tag it as a video about porcupines.  Hopefully a video scanner would pick up on the bananas and dismiss my porcupine tags.

Are one of these technologies the answer to the video advertising question?  It's possible.  It's even more likely that these two early technologies will give rise to another solution in the future.  Maybe the best bet is a combination of the two:  in-video advertisements selected based on a contextual scan of their contents.

Or maybe the answer is something totally different.  We'll just have to keep watching to find out.