Google to Offer Video Ad Service
Having mastered narrow, Google Inc. is going wide. The Internet search giant today plans to introduce a system for running TV-style commercials as it tries to capitalize on a fast-growing segment of online advertising.
Entertainment companies such as 20th Century Fox and Paramount Classics have been testing the service with trailers for TV show DVDs and film releases, and General Motors Corp. has been promoting its Pontiac G6.
But Google executives said they also hoped small businesses such as bed-and-breakfast inns would use video ads to attract customers on specialty websites. The video ads won’t appear alongside Google’s search results, just on the content websites of partners such as blogs and newspapers.
Google’s service debuts as big companies plan their media buys during the TV networks’ annual upfront spring ad drive. Online advertising soared 30% to $12.5 billion last year as advertisers shifted strategies.
Some advertisers, including Wal-Mart Stores Inc. and Hewlett-Packard Co., are championing an Internet-based auction for buying and selling TV ads. Google’s system is also auction-based, similar to its method for matching targeted ads with search results, news stories or blog postings.
Analysts said the video service might help Google lessen its reliance on search-related advertising and attract a new type of marketer, such as those that advertise on television.
“In order to tap into advertising budgets where it’s not just about direct marketing, they need to broaden their offering,” said Jupiter Research analyst David Card.
Mountain View, Calif.-based Google has excelled at delivering targeted ads in search results, when a Web surfer has already signaled an interest in a particular subject. But when it comes to flashy ads preferred by brand-name advertisers, Google’s text-based ads hold less appeal than display ads on Internet portals such as Yahoo Inc., Time Warner Inc.’s AOL and Microsoft Corp.’s MSN.
Web publishers that use Google’s AdSense service will start seeing the video ads on their sites sometime this week, said Gokul Rajaram, a Google product management director. He said he expected TV advertisers to test different cuts of a commercial through the Google system to decide which to air.
He also said specialized marketers such as makers of consumer packaged goods were signing up to demonstrate their products in ways they couldn’t through simple text ads.
“Many advertisers would like to have richer and more engaging messaging to show the benefits of a product,” he said. “We believe having a diversity of advertising is beneficial to users.”
The commercials will appear as static Web ads, but with a small video player. Clicking the play button will start the video playing in the ad box. An advertiser won’t pay for the ad unless the viewer clicks through to its website. If consumers fail to click on the ad, Google’s system will replace it with another, more relevant ad.
“The ad itself has to capture your attention and encourage you to click,” Card said.
Advertisers can select a more traditional method and pay a set fee per 1,000 viewers.
For the last month, Paramount Classics has been using the system to show a 2 1/2 -minute trailer for “An Inconvenient Truth,” a documentary about Al Gore’s campaign against global warming, on websites about independent films and politics.
Another studio, 20th Century Fox Home Entertainment, has placed commercials for DVDs of “American Dad” and “The Simple Life” on hundreds of websites. Google lets advertisers pick the sites where their ads will appear. Some are extremely small but popular with the young male demographic the studio is seeking, said Duncan Plexico, Fox’s executive director for digital marketing.
“They’re not only giving us the niche sites,” Plexico said, “but now we’ve got a rich media ad that breaks through the clutter better.”
