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With Internet delivery of video content surging to an unprecedented level, video has become one of the primary sources for online advertising. In this paper, we present VideoSense as a novel contextual in-video advertising system, which automatically associates the relevant video ads and seamlessly inserts the ads at the appropriate positions within each individual video. Unlike most video sites which treat video advertising as general text advertising by displaying video ads at the beginning or the end of a video or around a video, VideoSense aims to embed more contextually relevant ads at less intrusive positions within the video stream. Specifically, given a Web page containing an online video, VideoSense is able to extract the surrounding text related to this video, detect a set of candidate ad insertion positions based on video content discontinuity and attractiveness, select a list of relevant candidate ads according to multimodal relevance. To support contextual advertising, we formulate this task as a nonlinear 0-1 integer programming problem by maximizing contextual relevance while minimizing content intrusiveness at the same time. The experiments proved the effectiveness of VideoSense for online video service.