Industry Expert Says Google’s New Video Ad Service Doesn’t Guarantee a Market Lead

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May 24, 2006 — Google, Inc. announced this week it’s ready to launch video advertising on the web. The move positions Google to compete with television for advertising dollars. Google isn’t the first company to put video ads on the Internet, but the search giant’s approach has some unique aspects. For one thing, users are given control over whether to watch, or not. The video ads appear on the screen as static images, and it’s not until a consumer clicks on the image that the video starts playing. But what’s in it for advertisers? And how does this affect Google’s positioning in the Internet advertising marketplace? Podtech’s Catherine Girardeau called Andrew Frank, a media analyst with Gartner, in his New York office, to get his perspective.

Although he said some advertisers may complain about it, Frank thought putting consumers in the driver’s seat was a savvy move for Google. “Creating the opportunity for consumers to click on the ads as opposed to running them automatically turns them from annoying distractions into something engaging that the user can opt in on,” he said. Other innovations Frank sees in Google’s approach are that the company is positioning video ads in screen slots previously associated with display ads, and that the company has created a marketplace for advertisers to upload their videos and get them into the network easily. Google is offering to host video ads on its servers for its advertisers, so they don’t have to contract out with third parties to store their video content.

Some categories of content are more likely to succeed on the video platform than others, Frank said. “Success is probably going to vary a lot, depending on how well the context is matched up with the content of the ad.” Frank said. He mentioned lifestyle-oriented ads that lend themselves to video display are likely winners for advertisers. He also cited the example Google gives on their blog as a compelling use of the video platform: browsing a travel destination and seeing a video ad for a bed-and-breakfast. Frank said consumer electronics and gadgets would also be well served, or sold, by video ads.

Google’s launch of “non-intrusive” video advertising on its clients’ websites is just the first move in what Frank said is still a four-way race for dominance in the search and portal world. “Google video will meet up with Yahoo’s new ad service, which they’re planning to release next quarter,” he said. Also in the race, Frank said, are Microsoft’s ad center, and AOL, which announced last week it purchased Lightningcast, an online-advertising company that specializes in the placement of streaming video and audio content.. “I don’t think you can call this race over by any stretch,” Frank said.

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