Though the adoption of embedded media such as Adobe Flash and video players lets companies engage their visitors, it also eliminates the visibility into online activity that site operators have traditionally enjoyed. To meet that need, a raft of new companies like TubeMogul and Visible Measures have launched in the past few months, joining companies like Brightcove, which has been providing this with video delivery for several years, and Google Analytics, which recently unveiled an event model that tracks user actions such as interacting with a video player.

Now web analytics giant Omniture is getting into the game. The firm hopes that by tying video player interaction to visitor outcomes, it can give marketers back some of the visibility they’ve lost, helping them to better understand the effectiveness of online video.

At the Omniture Summit in Utah this week, the company is launching tracking technology that monitors user actions and ties them back to desired outcomes like forwarding a video, buying something, and or signing up. The system can also be used for in-page user interactions. Omniture, which has a market cap of roughly $1.5 billion and under 600 employees, earlier this year swallowed rival Visual Sciences, as well as site optimizers Offermatica and Touchclarity.

Built on the company’s ActionSource technology (for flash) and JavaScript (for embedded players), the new service tracks three aspects of online video: Engagement (how much, where, and what part of the video the visitor watched), effectiveness (whether the video makes visitors do something desirable) and how viral it is (where it’s hosted and who’s linking to it.) “We’ve got some things that a video tracking company can’t have, such as ‘How does the video affect the rest of your site?’” said Bret Gundersen, SiteCatalyst product manager. The new service is in beta with several video-heavy sites, including MTV.

But unlike TubeMogul or Brightcove, Omniture’s technology doesn’t actually deliver video. Operators need to have their own players or integrate Omniture’s tracking into their current service. “Using a video tracking service, you have to work with them to have them get the data into our analytics suite,” Gundersen said.

Video analytics are quickly becoming a crowded space. But Omniture may have an unfair advantage: Going beyond pause and rewind to look at the business outcomes of all those viral videos.

DEMO REPORT: Watching TV clips on the Internet is like listening to the radio on your TV: Sure, you can do it, but you’re really missing the point.

At least, that’s what Perry Wu, BitGravity’s co-founder and CEO, thinks. BitGravity runs a high-capacity content delivery network (CDN) designed to carry high-definition, real-time video that scales to large numbers of concurrent users.

Pricing its services around half the cost of comparable offerings, it’s fueling the CDN price wars we covered in November. With the ubiquity of H.264 in Flash and hugely attended live events such as the 65 million-stream Live Earth event in July of 2007, high-bandwidth media is definitely here. In fact, BitGravity’s service streamed the DEMO presenters live to thousands of viewers worldwide.

We sat down with Wu, a former VC and serial entrepreneur, on the eve of his DEMO launch of live video services to discuss the future of Internet video.

“We think Internet video can rival the cable experience,” said Wu. “Today, it’s about putting video on the Internet. But those are just the starting requirements for Internet video because it’s interactive.”

Wu outlined several major differences between true Internet video and traditional broadcast video. For one thing, interactive video is random access, so delivery networks need to be able to quickly handle jumps from place to place within a clip. And with every video clip leading to recommendations of a dozen others, the networks need to be able to handle what Wu calls “logical switching” as viewers move from one stream to another.

Wu also cited content security, storage and encoding as important functions of an Internet media CDN. But some of the most demanding requirements come from interactivity. Wu showed us a beta of wedigtv, an interactive blend of game shows and audience participation that goes far beyond one-way broadcasting. “You can even imagine video games using this technology,” he said.

The company faces established competitors like Akamai and Limelight. In 2006, Akamai acquired streaming media management firm Nine Systems, and offers a variety of solutions under the name of Akamai Streaming Services. Limelight (which is currently embroiled in patent litigation with Level3’s ownership of intellectual property from Sandpiper Networks) has focused on streaming services and high-bandwidth media.

But Bitgravity thinks that rich, real-time media places new demands on the way CDNs are buildt. So Wu, along with CTO and co-founder Barrett Lyon, took a grounds-up approach to content delivery.

For example, many CDNs rely on the DNS protocol to pick an entry point into their network or a cache that’s near the client. This reduces latency by bypassing the error-prone Internet, but the back-and-forth chatter of DNS means the user has to wait for video to start. BitGravity takes a different approach: It makes its streams and servers look like a peer to adjacent carriers, resulting in less chatter and less wait. BitGravity also uses custom storage technology, convincing some of EMC’s suppliers to build custom storage devices.

BitGravity is trying to compensate for inherent problems with video standards, too. Modern video streams save bandwidth by only sending frame-to-frame changes, and transmitting a full picture — known as a keyframe — only occasionally. This means video players need to wait several seconds for the keyframe before playing. But Lyon says the company is experimenting with keyframe pre-loading to make video play instantaneously without having to wait.

Lyon’s previous company, DDOS-prevention service Prolexic Technologies, was just acquired by IPVG. Lyon sees similarities between the challenges of content delivery and the challenges of blocking denial-of-service attacks. “Both are availability problems, providing massive outbound resources,” he said.

“Right now, most of the industry is doing incremental improvement,” said Wu. If we’re going to use the Net for more than just TV, it may take a more fundamental re-thinking of how we get real-time media.

Alistair Croll is a frequent contributor to GigaOM who attended the DEMO conference in Palm Desert this week.