Google PPC Video Ads – Why I'm Betting Against It

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Google will launch a new pay-per-click video ad product and syndicate it out through its Adsense Network today. Like Google’s normal text ads, Advertisers will bid for placement and will be charged when a user clicks on the video. A graphic will appear on the website displaying the ad. The Google blog post on the product is here. Worse, it appears that publishers that show adsense ads cannot opt out of showing video ads.

Here’s my initial impression: this won’t be popular for advertisers, publishers or viewers.

First, Google needs to eat its own dogfood. It won’t be placing these ads on their own sites for now. Why? Perhaps their early testing showed that consumers don’t want to click on these nearly as often as significantly less intrusive text ads. Or perhaps Google just doesn’t want to sully its super-clean site with this stuff. Either way, without Google search, advertisers will be significantly less interested in the product.

Second. When someone clicks on a video, they aren’t clicking through to a website, where some sort of action can occur that can be tied to an ROI. People like Adsense becasue it can result in sales or other trackable actions. Videos don’t do that. Even though the web is making multi-media drop dead easy, people still like text (and that’s why blogs are interesting to a lot more people than podcasts).

Third, small businesses already have a wonderful way of getting normal television ad spots produced and run. SpotRunner will help small businesses create an ad and run it on normal television for extremely low prices ($44 for ESPN in central California, for example).

Fourth, people don’t want to click on video ads. They don’t want to watch this stuff at all, really. And if a company comes up with a really cool ad, like Honda’s wonderful “Cog” ad, it’ll spread virally. They don’t need to pay users to watch it.

Fifth, Producing a video ad takes work. It’s easier than it used to be, but it takes a lot longer than producing a text ad. Only a fraction of the Adsense advertiser base will be willing and/or able to participate. This will drive down the auctioned ad prices per keyword significantly.

Sixth, all of these factors are going to contribute to low PPC and click through rates. Adsense partners won’t make as much money as they would from normal text ads, and I suspect these ads will take up more space (and the graphical nature will make it much more intrusive and disruptive to a web site look and feel). Publishers won’t adopt this.

My bet is that, like Google’s Click To Call experiment where people could click a button and call a business from their computer (making their home phone ring), this will fade quietly into the background.

And in the meantime, whether I’m right or wrong, Google needs to provide a mechanism for publishers showing adsense ads to opt out of showing videos.

Update: Seamus McCauley has some intelligent thoughts on this as well, and mentions both the languishing click-to-call product as well as the now dead Google print experiment. Good blog.

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