The program has been in beta testing for the past six weeks, said Gokul Rajaram, product management director for AdSense, with such advertisers as Paramount Classics for the film "An Inconvenient Truth," Fox Home Entertainment for DVDs of "The Simple Life" and General Motors Corp. for its Pontiac G6. The ads can be served on any Google publisher that currently displays graphical ads from Google. The video ads are static and boast a play button that activates the video.
Large or small advertisers
"We expect it to be popular with movie studios who want to show trailers, automakers who want to show demonstrations of the vehicle or consumer package-goods companies," he said, adding that he envisions the offering will be popular with both large and small advertisers. Imagine, he said, the owner of a small beachfront vacation home in Maui showcasing the home through video ads in a specific travel blog on the Google ad network.
"If you try to go buy video ads today, you find it impossible because much of it has been locked up for months and the CPMs are very high -- as high as $15," said Mr. Rajaram. "We wanted to bring the scale of our publisher network to video ads."
Advertiser reaction to the offering appears to be positive, especially as they seek out more opportunity to air video ads online. Wanda Young, director of interactive advertising for AllTel, said her company will look at testing the offering. "We are testing with different online video placements and hope to be smart about the use of it to extend our brand online without doing the wasteful exercise of dumping our traditional 30-second spot online."
Non-search ad program
AdSense is Google's non-search advertising program in which Web publishers allow Google to serve text or image ads on their sites. The ads are generally served contextually, because an advertiser has bid on a keyword associated with the site's topics, or based on site demographics, which Google counts on ComScore to identify. Google doesn't break out impressions in its entire AdSense network but said it will, from the get-go, create the largest potential video ad network.
For advertisers comfortable with AdSense, it will make video ads easier to deploy, and opening up the image inventory in AdSense will increase total video inventory, said Bryan Wiener, president of interactive agency 360i. He noted that flexible pricing makes it friendly to both branded and direct-response advertisers.
"This should encourage more brand advertisers to use AdSense," he said, but added the caveat that Google's auction-based system and the user-initiated nature of the video ads will make it hard to predict the volume of video ads deployed. "Advertisers will need to run trial campaigns to see what percentage of users watch the video ads and how much these numbers vary by publisher and campaign."
Advertisers pay for the ads on either a per-click or per-thousand-ads-displayed basis. Clicking to play a video ad doesn't necessarily mean a user will click through to the site and, if the advertiser has chosen to bid on a per-click fee, won't be charged. If an advertiser is paying on an impression-based CPM basis, it will be charged for every individual that watches the ad, although it won't be charged multiple times if one visitor repeatedly clicks on the ad to view it more than once.
Testing TV creative
Google is also pitching it to blue chip advertisers as a way to test their TV creative before it airs on the much more expensive big screen. For example, said Mr. Rajaram, a studio spending big in TV on Thursday night to promote the opening weekend of a film can quickly run a test of creative to various types of audiences, including those in varying markets, to see which creative gets the best playback rate and the longest duration of viewing during playback.
"What if you could really test to prove what really work, use that to make a decision on where to spend your really big TV budgets?" he said. "Within a few days you could run millions of impressions and find which [creative] solicits the best response."