Google Launches Contextual Video Ads

Google will begin showing “click-to-play” video ads on partner sites in its content network, the company announced last night on its Inside AdWords blog.

The ads join existing text, Flash, and image ad formats for advertisers in the U.S., Canada, and Japan. Google had been testing rich media ad units since January.

According to the AdWords blog, video ads will compete for placement on sites with other text, Flash and image ads. As with image ads, advertisers can choose to bid on a CPC or CPM basis. They will be available for campaigns with both site-based and keyword-based targeting, and can also be geo-targeted internationally, nationally, or locally.

To be less intrusive, Google is making the video user-initiated. When a page loads, users will see a static image until they click the ad to play it. The unit will have fast-forward, pause, and volume controls, and will click through to the advertiser’s site.

Google is touting the video ad unit as a good option not just for branding, but for direct marketing purposes as well. “This feature makes video ads much more accessible to all advertisers,” according to the Inside AdWords blog. “Now, an owner of a small bed & breakfast in Lake Tahoe can put a video tour of his beautiful chalet right next to an article that talks about skiing the epic slopes of Squaw Valley.”

The video ad units are expected to boost Google’s contextual ad network, which has been criticized for bein less effective than its search ads, according to Greg Sterling, principal analyst at Sterling Market Intelligence.

“It’s a fascinating development that starts to bring the promise of the Internet’s precision targeting capabilities to TV advertising. And, in a way, this is Google’s first step into TV,” Sterling wrote in his Screenwerk blog.

While video ads are certainly not new, the reach of AdSense and its related targeting capabilities make this offering stand out, Sterling said.

Join ClickZ’s Online Video Advertising Forum in New York City, June 16, 2006.