NEW YORK (AdAge.com) -- Lots of advertisers want to buy online video -- they just don't want to buy it in dribs and drabs from a bunch of different places. That quest for scale is leading to a swath of consolidation in the fastest-growing segment in online advertising.

Tremor Media, the largest independent network, reached a deal last week to acquire Scanscout, one of its smaller competitors, in a bold attempt to consolidate the market, and create a scaled competitor to Hulu and YouTube. Separately, Undertone Networks is expected to announce a deal Monday to buy Jambo Media, a video syndication and ad platform. Two weeks ago, Specific Media snapped up BBE, one of the first pure-play video networks in the market.

The latter two deals are about display ad networks attempting to add video capabilities, just as AOL added video inventory when it bought 5Min earlier this fall. The Tremor deal is about creating the largest independent source of video ad inventory, in hopes it can better compete for the TV budgets moving online.

TV advertisers are the ones moving most aggressively into web video, looking to achieve similar goals through it. "I think that has been one thing that has been missing for advertisers is the ability to deliver mass reach," said Chris Allen, VP-video innovations at Starcom USA. "A lot of our clients are married to the reach metric, and TV delivers reach as fast as possible. The only way to achieve that reach online is through a network."

While traditional display ads have slowed way down, video advertising is just revving up, growing an estimated 48.1% in 2010 off a relatively small base and another 42.7% to $2.1 billion in 2011, according to eMarketer.

"If you look at agencies and their motivation they are looking to buy the strongest and the biggest; this creates a must-buy against that," Jason Glickman, CEO of Tremor Media, said.

His play is to create a scaled player in the mid-market, something below Hulu, but above the mix of content available on YouTube. As it is, there isn't a whole lot of differentiation in either scale or offerings between Tremor or Scanscout, and other providers such as Brightroll or Yume. "You might see some price variations but most will come in at the same CPM range depending on the targeting you use," Mr. Allen said.

The combined Tremor/Scanscout served a collective 667.5 million video ads in September, according to ComScore, a close second to Hulu's 794 million and well ahead of No. 3 Brightroll with 476.4 million. Google served 242.5 million in September.

Tremor has raised nearly $80 million over the past four years. Its 2010 revenue is said to be in the $70 to $75 million range and is expected to grow to $110 million on its own in 2011. Scanscout has raised $17.5 million and has revenue of $20 to $25 million. Scanscout CEO Bill Day will become CEO of the combined company to be called Tremor Media and Mr. Gickman will become executive chairman.

Both companies, based in New York City, are profitable or near-profitable, given they are both still investing heavily in technology, said Mr. Glickman.

The combined company will look to complete an IPO in the next 18 months, giving investors the only pure play on the growth of video advertising, provided Hulu doesn't go public first.

Tremor's backers also won't rule out more deals to further consolidate the market. "You are going to see further consolidation," said Warren Lee, a partner at Tremor investor Canaan Partners. "After this deal we will still have a very strong balance sheet and there will be other things we can acquire in terms of products, services and technology."