Google Unveils Online Video Advertising Program

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7:20 am on May 24, 2006 | Category: Business, Web Services

Internet giant, Google Inc., revealed late on Monday that it is planning to move into a new form of internet media, by launching an online video advertising service.

Internet video has become more and more popular as broadband penetration has increased, and Google is determined to evolve right along with it. This is just one of the Mountain View company’s moves to expand outwards from its text advertising roots, and find more diversified sources of revenue.

Google will not integrate video with its own search results, but rather distribute the ads over its huge network of content-based partner sites.

“There are certain segments of advertisers who need a richer experience, like movie studios that want to show movie trailers,” noted Google project manager, Gokul Rajaram. “It’s more compelling.”

Although video ads aren’t a new invention, broadband is only now reaching levels that make online video accessible to the majority of mainstream consumers. Demand for such advertising will skyrocket in the next two years, according to eMarketer, with revenue expected to hit $225 million this year, and $640 million in 2007.

The new advertising service will use a similar PPC bidding system to the existing Adwords offering, with clicks expected to cost about three times those of text ads. Advertisers will be able to upload commercials of up to 2 minutes in length, and pay whenever visitors click on a play button.

Combining the PPC business model with video advertising could be a truly brilliant move for Google, boosting revenues far beyond previous levels. And the search giant’s plan of using its content partners to distribute ads definitely gives it a unique edge over other video advertising brokers like Yahoo and AOL.

If Google plays their cards right, they could easily duplicate their dominance in PPC search, and rocket to the top of video advertising as well.

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Comment by Bill — July 4, 2006 #