Today Google is launching "click-to-play" video ads that will appear in its AdSense network. The ads will be part of the same auction as text and graphical ads and feature the same targeting capabilities. 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.
All the AdSense targeting capabilities (context, geo, site/demo) are also available to these ads. Here are the official details.
This will likely give a much-needed boost to Google's contextual network, which has been assailed by competitors and is generally regarded as less effective than its search network. It’s also seen as the locus of more click fraud.
In addition, it suddenly gives Google a real product for brand marketers, something the company has wanted but hasn't really had until now. Yahoo! has had much more to offer brands. It will be interesting to see how many of them will try this out. Google indicated there are a number of advertisers already signed up. They have the same control in terms of where the ads appear as they would with “traditional” ads in the content network.
The videos themselves, from what I understand, are "opt-in." Consumers will see a graphical ad and then a video player within the ad. The video doesn’t automatically roll. The creative, which the marketer is responsible for, will presumably prompt the user to play the video. Google is apparently accepting all video formats and the duration of the commercials may be up to two minutes in length. (The Online Publishers Assn. found in March that most users would watch pre-roll ads of up to 10 seconds, but almost an equal number were willing to watch ads of more than a minute in length.)
There are lots if interesting potential uses, applications and implications. Video ads are obviously not new online. But the novel twists here are the reach of AdSense and its related targeting capabilities.
One use of this system (and presumably others that will develop shortly) is to "A/B test" creative before launching a campaign on TV. This is sort of like what's being done by some marketers who get users to vote on several different versions of the same campaign online. Another likely outcome is the acceleration of online video advertising in general and the creation of video ad networks in particular to rival Google. This will touch off the development and introduction of competitive offerings from the major portals and networks. And brand marketers will welcome the opportunity to combine the reach of TV (across networks) with the targeting and payment structure of PPClick.
TV has felt the sting this year of an uncertain upfront and some advertiser defections to the Internet. Brands will likely be eager to test the effectiveness of this program. And that might ultimately cause more TV ad dollars to move online. That’s a fairly safe prediction, but the percentages are too early too tell.
Broadcast and cable TV advertising in the US will be worth approximately $38 billion this year according to Universal McCann.
In terms of local targeting, an airline could, for example, create a discount fares campaign for certain cities and through Google's content network relatively efficiently reach those selected markets (at comparatively little cost vs. TV). But as the demographic targeting capabilities of the Google content network improve over time (as they will because of pressure from Microsoft) one could have "layered" targeting — e.g., 18-34 year old males in the Pacific Northwest, etc. There are lots of interesting possibilities along these lines.
One of the challenges of online advertising for publishers is getting traditional media revenues from performance-based products. Video may well be a breakout category. The reach + targeting capability could command a premium from advertisers — eventually — and generate significant revenue for online networks.
Additional thoughts: Brand marketers are drawn to video obviously but the lack of full control over where/when those ads appear in the content network and on particular sites, and the fact that users must initiate the streams by clicking them may inhibit some advertisers from trying this. It's not TV advertising and will require different thinking and a somewhat different approach. But I do believe that agencies will pitch and test this on behalf of their clients.
Michael Arrington on TechCrunch dismisses Click to Play and predicts it will fail.