Last November, marketing director George Wright uploaded five videos to a new website his company had created. The videos were simple: They showed Wright's boss, K-Tec founder Tom Dickson wearing a white lab coat and safety goggles, operating one of the company's products.

Since then, the small Utah company's videos have been watched more than two million times, and Dickson has made an appearance on NBC's "Today Show."

The secret to K-Tec's killer video strategy? An amusing series of video product demonstrations called "Will It Blend?" that feature Dickson dropping things like an iPod, a golf club, and a bag of marbles into K-Tec's high-powered $400 blender.

In 2006, video viewership on the Web exploded. Suddenly, the average U.S. consumer was watching about 100 minutes of video per month, according to comScore Media Metrix. TV networks began putting more of their shows online, supported by advertising or sold a la carte through Apple's iTunes Store. From January to June, YouTube was the fastest-growing site on the Internet, according to Nielsen/NetRatings. Before the year was out, the site had been purchased by Google for $1.65 billion, and was reaching a monthly audience of 29 million visitors, according to comScore.

But while media conglomerates have long been considering the impact new online viewing behaviors will have on their businesses, most enterprises are still trying to make sense of the video explosion and determine what role video will play in their external and internal communications.

"Before long, every website will use video, whether it's produced internally or by someone else," says James McQuivey, vice president at Boston-based Forrester Research.

Internet video presented right can create a competitive advantage, reaching audiences less expensively and engaging with them longer than traditional broadcast media. But deploying video effectively will require adaptability and constructive communication between IT execs and their colleagues in other lines of business, such as marketing, sales, and human resources. Together, they'll have to address a dizzying set of questions: What sort of videos will be produced, on what kind of budget? What format will they be stored in? Will they sit on a company-managed server, or one run by a third-party? Should videos be available forever at the same URL, or will they need to be expired at some point?

"Video is the next great content type to manage," says Steve Pattison, vice president of marketing and business development at Media Publisher, Inc., a company that sells software for managing video assets.

Moving beyond marketing

Most of the earliest corporate users of video have been focused on marketing, like K-Tec's "Will It Blend?" series or Frito-Lay's advertising contest, in which the best consumer-created ad for Doritos was aired during the Super Bowl this past January and five finalists were awarded $10,000 each. (One analyst estimated that Frito-Lay's consumer-created ads were seen by more people on the Web than during the Super Bowl telecast itself.)

But increasingly, companies are using video to communicate with current and prospective employees, business partners, distributors, sales agents, shareholders, and Wall Street analysts. At Microsoft, a site called Channel 9 offers videos of interest to the company's community of developers. K-Tec has created several videos that cover the installation and operation of its commercial blenders, which are used in restaurants, cafes, and bars, and Kohler Co., the Wisconsin plumbing supplies company, offers video installation guidance for professionals and do-it-yourselfers. Companies like Johnson & Johnson and Sealy Corp., the mattress manufacturer, have augmented their annual reports with videos; one of J&J's clips focused on the development of a next-generation sunscreen product. At Charles Schwab, employees can watch executive presentations on topics like corporate social responsibility.

But Andrew Salesky, senior vice president of client Web services at the San Francisco-based financial services firm, says that the company's video strategy is still predominantly focused on videos that will attract new customers. "Referrals from satisfied clients are the number one reason we grow," Salesky says, "and what we've tried to do with videos is show clients talking about their experiences at Schwab. It's like a virtual referral." The company also posts all of its television ads online.

Video content at both Schwab and Kohler is produced by an in-house ad agency. K-Tec employs a single video producer, who also makes trade show videos and instructional videos for workers who use the company's commercial blenders. The production ethos at K-Tec could be described as "keep it cheap." The video studio is "a corner of a room, with a backdrop and walls and our little blending platform," Wright explains. "When we make a video, there are about four of us there, including myself and Tom Dickson" (the company’s on-camera spokesperson).

Taking a coordinated approach

Marketing, sales, and human resources executives tend to be the catalysts for video initiatives in most companies. For that reason, the potential exists for them to add videos to the corporate website or post them to third-party video hosts like Brightcove or YouTube without IT's involvement. That lack of coordination can create problems—like a sudden surge in bandwidth usage, videos circulating in many different formats, or lack of control over where the company’s videos appear.

"With a customer like eBay, we saw a lot of video usage in departments such as corporate communications or for applications like distance learning," says Steve Pattison of Media Publisher. "The corporate communications users were screaming, 'We need to do this,' and IT was thinking, 'OK, how does this work?'"

Together, IT and business units can start to determine whether video should be stored in-house or by a third-party vendor, and project how much bandwidth will be required for enterprise video.

Often, companies decide to work with a content delivery network to make sure that videos load quickly and don't freeze mid-play. "If you're a large enterprise with offices around the globe, providing a good video experience is complicated, and performance is an issue," says Suzanne Johnson, senior product marketing manager for Akamai's digital media solutions. Among the company's customers are Anheuser-Busch, which offers video content to thousands of employees and hundreds of distributors. After watching its own bandwidth bills skyrocket, K-Tec now chooses to use the free hosting services Revver and YouTube for its videos; Kohler pays a fee to Brightcove, based on how many times its videos are seen.

"By our measure, it's a reasonable cost, and it's better than hosting or streaming the stuff ourselves," says John Engberg, Kohler's manager for media planning and online marketing. "We don't want video to be something that crashes our servers, and we like being on somebody else's backbone."

Many companies also commit to a standard format for producing and distributing video. "The most popular formats we're seeing, from a trend perspective, are Adobe's Flash and Microsoft's Windows Media," says Johnson. "Flash has great cross-browser capabilities and people like Windows Media because of the digital rights management capabilities."

Other tech issues to consider, says Pattison, include content management, permissions, and usage reporting. "You want to see who has viewed what and for how long," he says. In many cases, data about video usage needs to be integrated with website analytics software, allowing a company to track what a user did after viewing a video—like opening a new account or filling out a form requesting more information.

Only a few companies have begun experimenting with tagging their videos or dividing them up into chapters so that users can jump directly to the part of a video they want to see. "As videos get longer, and you have training classes and CEO speeches and product demonstrations, the user needs help figuring out what's inside a video almost before they start it," says Howard Seibel, vice president of marketing at Veotag, a company that offers a tagging system. "It's like looking at a book's table of contents, rather than flipping through the whole thing at random." One tagging pioneer is the nonprofit group Jazz at Lincoln Center, which presents several of its master classes with jazz musicians online, complete with a clickable breakdown of the topics they address on the right side of the screen.

Companies creating a video strategy must also address the question of control: How widely do they want to make their videos available? K-Tec is happy to have its "Will It Blend" videos spread far and wide. "If you want to create a viral advertising campaign, you're not going to be able to control it," says Wright. "That's an inherent risk." The videos can be easily e-mailed to friends and embedded in other websites, and the company offers an RSS feed that users can subscribe to, so they see a link to each new video when it appears. (The company produces about four or five new videos every month, often based on viewer suggestions.)

But Schwab prefers its videos to play only on its website. "Being a regulated firm, we have to be very sensitive to the communications we make available," Salesky says. At Kohler, any video that the company uploads to Brightcove can be taken down if necessary.

Even in mid-2007, some companies still regard video as an experiment. "We're continuing to test whether this is an effective medium for explaining the value of a Schwab relationship," says Salesky. "Does it impact a prospect's likelihood to convert?"

But at K-Tec, George Wright has already been converted. "Our Web sales have increased by a factor of five," he says, "and our products have a bigger presence at retailers like Sam's Club and Costco because of 'Will It Blend.'" In March, Tom Dickson was booked on "The Tonight Show," where he blended a rake handle.

Video, says Johnson at Akamai, "can be a lot more entertaining than sitting and reading a brochure."

But creating video that people will want to watch and delivering it in a way that makes sense for the organization will require two things: hands-on experience working in the medium; and an ongoing conversation between IT and the relevant business units.

About the author: Scott Kirsner is a Boston-based technology journalist and author of the recent book, The Future of Web Video: New Opportunities for Producers, Entrepreneurs, Media Companies and Advertisers. He can be reached at kirsner@pobox.com.