Well, it depends on how people make the ads, I mean a funny ad is always welcome. The superbowl ads are probably the most popualr reason for watching the football game.

I hope that publishers would be able to also screen video ads before they allow them on their site.

the article says:

Sites have the option to reject the graphic advertisements and will be able to opt out of the video ads as well — for instance, because they are already selling such ads themselves. But Google said most of the sites in its network had agreed to display the video advertising.

I have to say that I disagree with Michael here. I think he is thinking too much in terms of how this will be viewed by current Adsense advertisers (ie small-medium businesses). This is, of course, not the real audience- Google is going after the big brands.

Michael says that “People like Adsense becasue it can result in sales or other trackable actions.” Well, the big name advertisers HATE adsense because they are looking for branding and influencing real-world purchasing patterns. You don’t buy a Pepsi online.

He also says that there’s no need for video ads, just create a great ad and “it’ll spread virally… don’t need to pay users to watch it.”. Well that perhaps works with the top 0.01% of ads, but isn’t really a feasible marketing strategy. And most of this “viral” stuff only really applies to 53,651 anyway.

I agree that video ads will cost a lot more to create, but I think they will mostly be used by larger advertisers who already have commercials and product footage that can be easilly be converted into ads.

I also agree that clicks will be lower. I can only imagine that Google will move to PPView. Seems a no-brainer.

I’m with you on this one Michael. Firstly, we’re bombarded with that much visual advertising in our lives, these video ads are almost anitsocial by nature which may give marketers the yips. Secondly, why watch an ad when you can click on a link and get through to the website of the advertiser, and selectively and unobtrusively get the information you want? By the way, interesting evening last night at the Pitcher and Piano…cheers for that.

Definitely agree with Michael. Google is starting to look very much like a company who’s running out of fresh ideas and is desperate to steal any market share on any product that could be “hot”.

How much do any of you click on video ads?

Agreed on all fronts. I’ve long held the belief that Google will become the single biggest cross-media advertising network in the world, but this appears to be premature.

The main reason why this won’t work is down to content creation, which is going to be highly problematic. Making a TV commercial isn’t exactly the lowest hanging fruit, if you work for an SME, or even a corporate (lots of hoops to jump through, not to mention a need for significant budget). Text ads, by comparison, are easy and cheap to produce. So for that reason alone, I can’t see any scale in this.

Does Google know something about rich media ads that we don’t? Rich media ads have typically generated higher click rates because they’re intrusive. Lots of clicks are in error. And users hate them. Floating ads = pop-ups 2.0. These Google ads aren’t going to be floating, presumably. So why does Google think they’re going to generate lots of clicks?

It doesn’t sound like a good deal for publishers, but then we don’t know the % revenue share from Adsense, so it is tricky to say for sure.

Maybe these ads will be sold on a CPM basis? But do you think the publisher will see 70% of the revenue? No, me neither. So why would a publisher choose Google as its rich media ad network when there are better deals elsewhere?

And the day we see these ads polluting Google.com’s search interface is the day I change my search engine.

Mike,

It was announced on Googles Adwords Official Blog http://adwords.blogspot.com/

The example shows a text link top the advertisers site too.

I think it’s a great idea. Especially for corporations to do A/B testing on variations of TV commercials to dry-run them for popularity.

While you make some valid points, i think I’ll have to disagree with you.
1. People don’t want advertising on the internet at all — but yet it still exists and it’s still a profitable business model for many publishers.

2. While I’m not sure the PPC model works as well as an impression or even audience model, the price per clicks is obviously going to be much much higher than that of a standard text ad, tot he point that if one person clicks on the video, I’d imagine that it would yield a fairly high return (taking a stab in the dark on this one).

3. Last year google had 400,000 advertisers. That’s a lot of companies that would potentially want to put video on the internet.

4. There’s a LOT of publishers out there that can’t afford the luxury of creating and processing their own video ads, and have looked at ad networks to fill this gap. Google already has thousands of publishers, and I’m sure there are quite a few of them that would buy into this.

The sheer fact that it’s google, will give some weight to the product. I think you have some valid arguments, but I wouldn’t write this off just yet…

Disagree with you on most fronts, much of which has already been covered in other comments. Furthermore, you completely misunderstood the reason people don’t listen to podcasts the way that they read blogs: speech is the slowest form of communication. It’s much faster to read the transcript, unless you are doing something else (driving, exercising.) Video is completely different, you have to watch it (assuming it is more than talking heads.)

As a content publisher and someone who uses Google links on our sites, I’m not too keen to have third party videos play on our site. We generate in excess of $100k per month via Google but like them because they are discreet, are put at the bottom of our site pages yet still generate revenue without conflicting with our display CPM sales drive. If those Google placements start getting a lot noisier, then I’d have to look at what we did with them. Put it this way - the CPC would have to be much higher than it is for us to use them.

I would be happy if clicking on the ad took the user off to a 3rd party site and the video played from there (same as current setup) - but not if it played over our sites.

George

There’s tons of companies out there that already have commercials to run. ConvertToFlash(TVCommercial) - voila! This is the only way for Google to reach the really big bucks.

I think Google is on the right track. How much TV advertising is relevant? Radio? Not much except in the most general way. Hey I’m not 18-35 any more. Google’s new program allows brand advertisers to place ads where they might actually be wanted and watched. I can’t think where I’d want to see another Mountain Dew rich media ad but I think Adsense will figure it out. And if you are selling a complicated gizmo or concept, video ads really are the way to get the message across. But that works best in Adwords not Adsense.

I wouldn’t be so quick to say that there is no immediate action that a user can take to respond to the ad. How about this: A user sees a video ad, clicks on the screen to directly call the advertiser and take advantage of a special promotion. How much do you think an advertiser would be willing to pay for something like that?

Yes, the CTR will be lower, but the CPC (cost per click ) will be much higher. If anyone thought that Google launched gTalk to compete with Skype, here comes the wake up call.

Google, eBay, and any other big company who knows what’s what is building up for the rise of PPC 2.0 (pay-per-call ).

This is definitely the right move for Google. Don’t you see the trajectory, Mike? In the last month, almost every major TV network has put streaming up, printed media like newspapers and magazines have started publishing video and audio…

What’s more, video ads online are getting even more popular with advertisers. First it was just movie trailers in ad units, but now more advertisers are actually creating video specifically for online. Why? Because they work, and people are CRAVING video content.

As far as these being intrusive, I think people are more intrigued by seeing embedded video in pages. It’s more of an “experience” than an image ad. I don’t know about you, but when I see a YouTube or Google Video embedded in a page, I want to click it.

Also, these video units DO click through to the advertiser site. Not on the initial click, but any click after that on the video.

And the web is the future for small businesses. It’s much lower cost of entry, with much better targeting. Why would a small business want to throw money away on a crapshoot TV campaign, when they can target geographically and only pay when someone acts?

I think you’re dead wrong on this one. Google may have jumped the gun by a couple years with the small business angle, but big brands will be jumping in. In fact, I’m going to go talk to a client about it right now.

While valid concerns raised here no doubt are vexing these new services creators, as other posters have already stated there are very good reasons why these new media are needed.

But I think, like in 2000, tech is at risk of getting ahead of the target audience. Once that happens, we’re counting the quarters til a correction hits.

Targeted web video & phone ads will no doubt turn out to be valuable marketing niches but the question of when is a tough one.

You all are making the argument that there a lot of companies that would be willing to pay for this service…something I personally agree with.

What has been missed is the lack of interest on the user side. Big brands can spend as much time and cash on this product as they’d like. The constant will remain that people will not want to watch video commercials on a medium where they allready do not need to. Hello…has anyone heard of TIVO? Can we not agree that a major selling point of TIVO is that it offers the ability to skip/fastforward through commercials ultimately removing the very thing that Google just decided would be hot.

Are they not going in the opposite direction from where they originally began?

Brandon said: 2. While I’m not sure the PPC model works as well as an impression or even audience model, the price per clicks is obviously going to be much much higher than that of a standard text ad, tot he point that if one person clicks on the video, I’d imagine that it would yield a fairly high return (taking a stab in the dark on this one).

Simply not going to be true. Michael already covers this above. TV ads are highly-priced because of all sorts of factors including branding, habit and the potential for advertisers to reach a mass audience. High cost to advertisers is not an intrinsic feature of the aesthetic richness of the visual medium, especially when the capacity to transmit rich visual ads is no longer scarce. PPC for this is going to be low because the commercial model is an auction and the people bidding will be deciding what price to bid by comparing the ROI they get from text ads to a video ROI that simply isn’t there.

Entropy: the question of ‘when’ is indeed the key in all of this.

Joining up and personalising TV consumption = big, big bucks. But until IPTV and the networked home is a reality I can’t see the scale, not for the mass consumer markets.

Sure, TV stations are starting to experiment with streaming, and I’m hearing that insiders are somewhat amazed by the take-up. But early adopters are not indicative of the real market, nor do they help us get any insight on when critical mass might actually occur. And I think that’s more a case of when people will be watching shows on their TVs from the comfort of their couch, not when enough people will be watching shows on their laptops. TV isn’t a sit-forward medium, remember.

I don’t think we’ll move from broadcast to singlecast TV within 5 years in any great scale. Could take a lot longer. When it does I’m expecting to see *only* relevant ads, if any ads at all.

I think Michael is mostly right about these video ads. It’s not going to be a huge hit for the bulk of AdWords users, especially the online merchants. But for certain verticals it might work very well. The example google gave on their blog is a video tour of a bed & breakfast. I think it can also work for used car ads to give a better impression of the product. For service oriented companies, it would be interesting to see customer testimonials. A lot of professionals such as lawyers, accountants and certain kinds of doctors that depend more on their ethos and reputation also may use it to put a human face on their firms. So I think google’s going to have to work hard to make this new feature stick, but it’s by no means doomed to failure. I do think they should start by eating their own dog food though. At least have the video ads display on some google properties if they don’t want to clutter up the search pages. Or have text links to the videos and make them a supplement to the text ads.

I am not seeing Spotrunner work at anywhere near the $44 commitment level.

In fact, I see the minimums with them in our experiments with it much higher. 10 times higher. I would love to see something in the video area at the $50 level for small business. If someone knows of a solution let me know.

I think the reason these video ads are not on their own site is because they probably felt the relevance factor is higher on the user’s pages than
on their own search page results.

Hi Mike,

Long time listener, first time writer. Sometimes I wonder if you say what you say just to get a reaction. After reading this, I think that is the case. Now I need to figure out if you’re non-critical on purpose (much like conservative talk radio, where the softballs are thrown for easy hits and entertainment value), or if you’re on the payroll of someone else who is using your popularity for messaging (the ultimate advertising). However, it could be you simply feel the need to blog on what is already popular (and quickly) in an effort to keep your site green.

The only point that cannot be shot full of holes is #5.

Cheers!

Blong - I think this article is pretty darn critical of Google, so I’m missing your point/question.

Blong - If anything, I think Mike is being overly critical. While his points are valid, I tend to agree with Matt (#2). If large companies are spending huge $$$ to create TV spots, doesn’t it seem that they would like to also broadcast these commercials on the Internet?

As an advertiser, why Google Video Ads are better than TV:
1) Feedback. Advertisers can get very accurate information on the number of times their video has been watched or ignored. You can’t do that with TV.

2) Targetting. You can specifically target your ads to a select audience more effectively than TV.

As a publisher, Google Video ads may not be that desirable for every particular situation, but I’m sure that their are publishers for whom this service will work better than textual ads. Surfers are getting used to “tuning out” Google Ads. If I see anything that resembles a Google Ad, my brain automatically ignores it.

I agree with Michael, good luck to Google. First, The entry of using video advertisement is much harder than text/graphical advertisement. I want to see how Google pull this off and make this popular. Second, all of the existing flash/video ads are intrusive, meaning they play automatically. That’s why I have chances to watch video advertisements - some are really annoying, but some catch my eyes. However in Google one, viewers have to press play before viewing the ad. This is good for the user, but bad for the advertiser - I wouldn’t press play at all if I know it is an ad.

Maybe they just don’t care if it is successful or not. They just want to stick a flag on the video-ad territory.

I doubt that video ads will appeal to many web users today; however, I doubt that is Google’s long term objective. If I had to venture a guess, I’d say that Google is trying to build an inventory of video ads for later use with video streaming over the web; whereby users who clicked on a particular video, would first have to watch a video ad before the video played. The idea being that user are willing to watch a short ad before a video plays because they place more value in the video they are about to watch than some static content on a webpage. Once Google has an adequate inventory of ads, they can reach out to traditional and new content providers to become a provider of ads for any site that wants to monetize a video content.

I think whether this lives or dies (at least in the short to medium term) will depend largely on presentation and execution. In general, I think that rich media advertisements on the Net are a solid idea - their reach will soon expand far beyond some obscure, local TV station, and PPC means that the ads do not have to be expensive to produce - without having to pay up front one can easily risk submitting an ad that is a basic flash cartoon or some amateurs with a webcam…

Similarly I think that the click-to-play is a great idea - there is nothing more annoying than some animation (whether advertising or not) that you do not want to see. I also see no reason why Google would not add a second tier of clicks to this which then *could* link to a website or whatnot…

That having been said, it will be interesting to see exactly what format this all takes (e.g. the video size has to be large enough to be viewable, but small enough not to take up too much page real estate when not being played), and how relevant it is (i.e. it would have to be much better than AdSense - to give an example of what I am reading right now, linking the “system” in the phrase “heavily overclocked system” to a “strategic planning and keynoting firm” is borderline idiotic).

If Google gets the presentation of this right, they will have a winner. Certainly, it makes far more sense than the pay-per-call scheme, which utterly ignores the fact that most people (and the younger they are, the more true this is) have absolutely no desire to talk on the phone with a sales rep *ever*, let alone while using the Internet.

I had the same reaction to the fact that Google isn’t offering this on its own site. And you raise some really good points that work against this model — especially the additional creative requirements. As an Adsense syndicator, I’d probably experiment with video ads because a) I would imagine I’d be compensated for them, b) they’ll probably get decent performance especially before the novelty factor fades. Like and Adsense format, I imagine anyone could opt out of them. Most importantly, I’m assuming that as an advertiser I’ll get peformance data on when people serve the ads and how far they get. If this assumption isn’t true, then I wouldn’t bother.

>>>If I had to venture a guess, I’d say that Google is trying to build an inventory of video ads for later use with video streaming over the web

We live in a video-centric society. Face it, we’re a nation of idiots. People don’t want to read — they want to watch. And it’s all about being captivated and entertained. Even if video is supposed to be selling you something, you’re going to watch it if it’s funny, emotional or even dramatic. It’s what people want. It’s not rich media anymore — it’s preferred media. If we’ve proven anything as a culture, it’s that we’ll watch virtually anything that is put in front of us. That’s why video will take over (very soon) as the ONLY medium people will respond to.

“Fourth, people don’t want to click on video ads. They don’t want to watch this stuff at all, really.”

I would watch a good, relevent video ad. Don’t people like good tv ads?

I think this will NOT fade away at all…

Of course people don’t want to click on video ads. In the consumer-controlled media universe, advertisers have to produce a different type of content, more engaging, entertaining, educating or informative. Viral ads are just one aspect of the new equation. Ideas are more relevant then in the traditional 30-second environment and the production strategy has to be way more creative. Production companies have to explore new business models and forms compensations that go beyond the cost-plus scheme.

FWIW without going into any details my company has tried pay per click video ads, and we have found that the click through rate on a video ad is 20x higher than a standard adSense word type ad. That was on a popualtion of a few hundred thousand spots per day over a month. Your mileage may vary….

“as well as the now dead Google print experiment”…. umm try http://books.google.com , it’s a new name that’s all. Google changes the names of their services often before moving them out of beta.

[follow up] Ok, I see you were talking about the idea of google doing print based advertising, not print.google.com sorry!

This is very interesting. Are you certain that the publishers can’t opt out at all? For instance, adsense allows you to opt out of image ads. Are you saying that there are vide (and thus image) ads showing on sites that opted out of image ads?

I’m very surprised at the reaction from the TC audience, especially since most of the readers are early adopters.

Who cares if Google bombs at this in 2006? Or in 2007. Or in 2008.

The reality is that they need to lay the groundwork for analogous versions of their ad model and they can AFFORD to bomb where very few others can, which provides a huge long-term competitive advantage.

I agree that video ads will suck for most blogs, and Mike’s right - they should give publishers the right to turn them off.

Pay Per Click video ads are going to happen. They will find their home and perform incredibly well if for no other reason then they are going to give the “smaller guys” easy, affordable access to the new medium.

Isn’t this just like any business venture? Throw it against the wall and see what sticks. Eventually most advertising will appear to us all with either motion graphics or video and there is no reason to explore the sucessfulness of this on websites. It’s just another way that video is becoming the main medium of the web, or perhaps it already is.

Very Nice Article, I don’t know, Google has to know what it’s doing.. It’s google for gods sake

What’s next interstitial’s?

Well I don’t think people will spend the time to watch the videos. Even if they do and don’t click through then I don’t think it is fair for the publisher. If people are spending time watching Google videos on my site, I expect them to pay for it even if there is no click through. I am not sure how Google is going to tackle issues like this.

The main issue here about Google ads in video format is such that Google Video takes up a considerable amount of bandwidth. If you know Youtube.com, you will understand what I mean.

Advertisers won’t be the ones hosting the, so Google will be hosting the video files. If the Google is going to capture the general public, then it will require a mechanism to ensure its video is streamlined and highly compressed. Otherwise, no one is certainly going to click on the ads.

Video ads? Hmm… as a publisher I’d like a three-tier model.

Nothing for seeing just the static image (ie zero CPM)

A small amount for playing the video (some interest displayed)

Full CPC for clicking through to the site. (as in text ads)

Also, text is largely the same, my text is not that much better or worse than the next guy’s… but color video’s/thumbnails? Some of them could look horrible and annoy publishers.

Back in February Marketing Vox reported on the decline of search based ad spend during 2006, an obvious hit to Google’s pockets. Mainly due to a switch from straight demand generation to brand building. This may be their attempt to regain some of that cash and also tempt some of the bigger players into their network.

Thanks Mike and Erik,

By “critical”, I was refering to critical thinking, and not criticism of Google’s decision to support video ads.

Mike, you can opt out of serving video ads. Google treats image and video ads as the same so if a publisher doesn’t want them to be displayed they would simply opt out of display image ads which would opt them out of video ads. Currently there’s not a separate opt out feature for each one…

One more ad for Ad Muncher to eat on my system.

http://www.admuncher.com/beta.pl

Nothing to see here move on.

Video will be very successful - depending on the product or service being pushed.

Some products or services “come to life” with the correct Multimedia.

Certain types of users are more intrigued by the allure of multimedia.

Since this is an “opt-in” model, it will not infringe on the preferences of the more traditional surfer.

PPC on video ? That’s very interesting for local media websites who need to collect more tv ads, serious ads for serious content. I think it’s gonna rock. i totally agree with Google new investigation.

“In the meantime, Google needs to allow publishers to opt out of showing video ads.

And in the meantime, whether I’m right or wrong, Google needs to provide a mechanism for publishers showing adsense ads to opt out of showing videos.”

Michael, how many “meantimes” are we talking?