Princeton, N.J. - Revenues from local online videos in the U.S. are projected to reach $1.5 billion by the end of 2012, growing at an impressive 168% compound annual growth rate from $10.9 million in 2007, according to a report from market research firm The Kelsey Group.

The firm also predicts that video ads will comprise 11.6% of the online ad budgets of small and medium-sized businesses by 2012.

Fueling the growth will be production companies targeting small businesses, such as Spot Runner, Mixpo, SpotMixer and TurnHere, and an expected rise in companies looking to add video to local listings and business profiles.

The Kelsey Group based its projections in part on a March 2008 study it conducted that found 62% of consumers had seen an online video ad, up from 59% in 2007.

The report further found that, of consumers who had viewed an online video ad, 47.3% had then visited a website, 19% requested product information, 18.2% went to a store to view a product, and 16.9% made a purchase.

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