Today I got an invitation to attend a training session for Google video ads. Internet video is the latest “new, new thing” to sweep through Silicon Valley – not unlike mobile commerce, local search, procurement, etc, etc. For about six months, you’ll see dozens of start-ups getting funding, ridiculous projections of market size from inane news sources like ClickZ, and probably two or three conferences dedicated to Internet video. So it only makes sense that Google jumps on the bandwagon and prepares a product around video, right?

Well, yes and no. The problem is this: Internet video is exactly the kind of product that Google’s advertiser won’t use, simply because it is too technical, requires too much effort, and won’t be sold on a CPC basis. But that doesn’t mean it won’t eventually be a good idea. Read on.

Let’s start with Google’s advertisers. Last I heard, Google had over 600,000 of them. The vast majority are “mom and pop” companies like a local dentist or a mail order helmet company. The big players tend to be “direct marketing” companies like eBay, Nextag, or Amazon.

Obviously, small advertisers aren’t the target audience for this product. The beauty of Google AdWords is that it enables small advertiser with no marketing resources or graphic design skills to effectively compete in online advertising. All you need to do is buy a few keywords, create a text ad, send people to a reasonably good Web site and voila, you’re an online marketing expert!
Compare that process to hiring a video production company to film your video ad, finding a voice-over artist, and generally paying tens of thousands of dollars just to produce your video (prior to getting any traffic whatsoever) and its pretty clear that Google Video Ads is the polar opposite of what the majority of Google’s advertisers need or could possibly use.

So, then, I guess Google Video is intended for the eBays and Amazons of the world? Well, maybe. It’s true that eBay is spending a lot of money on TV ads these days, and there is certainly a lot of TV and radio advertising by travel companies like Orbitz or Travelocity.

I think, however, that Google is going to have an uphill battle getting these companies to invest a lot of resources in Video Ads. First, these big players are slow-movers. They generally have bloated bureaucracies and new marketing products get lost in the shuffle. Moreover, Google is in their “CPC” budget not their “branding” budget, which means that either the CPC team is going to have to buy branding ads (which will upset the branding team), or the branding team will have to buy branding ads on Google (which will definitely upset the CPC team!).

A comparable product failure Google just endured (you’d think that they’d learn . . .) is Google Print Ads – the ‘auction’ for space in Ziff Davis magazines. Buying print ads through Google doesn’t appeal to the small guys (who don’t have the resources or knowledge) and the big players will just go directly through the magazines or their agencies.

In sum, then, Google Video is basically a product without existing customers. So why is Google launching this product?

Well, Google has not made a secret of its desire to capture the “G1000” – the top 1000 advertisers in the US. These are the Fords, McDonalds, and Mastercards of the world, the companies that love clever ads from clever advertising agencies. Google Video – along with Google Print, Google Radio, and Google Site Targeting (CPM) – is the carrot to get these big (and dare I say, dumb) advertisers into the fold.

CPC advertising is about as familiar to General Motors as branding is to an affiliate marketer. So if a Google ad rep walks into GM’s ad agency’s cushy offices and proposes a 10 million click campaign, they’ll get a lot of dumb looks. But start talking about “video” and “lift” and “branding” and suddenly the ad agency wakes up! Video is an opportunity to be creative, to be clever, and best of all, to measure success based on “lift” and not on “ROI.”

GM isn’t going to drive up Google’s stock price by purchasing millions of dollars of video ads (or site targeting). But hey, maybe you get GM in the door with video, and then once you’ve established a rapport with the marketing folks, you slowly introduce some CPC ads into the mix. And maybe a little later on, you start showing some metrics to GM – about how CPC is far more impactful on the bottom line than those one million dollar Super Bowl ads the ad agency keeps pushing.

Suddenly, GM realizes that those Google Video Ads are pretty silly, and so is the hundreds of millions of dollars they’re spending on ad agency and big TV ads. One GM can spend as much on CPC as 10,000 small advertisers, and it’s a lot easier to manage one company versus 10,000.

So will Google Video take off in the next six months? Of course not. But is it an entree into a pool of new clients Google has been desperately seeking for over year? Possibly, we’ll have to wait and see.

1 Comment

  1. WRHornbeck July 4th, 2006

    For those readers looking for an easy software tool to create, host and deliver Video Advertising, then take a look at the StreamerNet Mobile Video Producer.

    The company has released the first “plug-and-play, click-and-stream” software program (WinXP) that lets you create your do-it-yourself sales commercial and upload it to your private StreamerNet video library. Simply place the provided link within web sites or AdBoxes and subsequent click-thrus will stream the video ad to the viewer.

    More details at

    This product is a swiss-army knife which enables simplified creation and management of all things video, such as video email, live streaming, media conversion, podcasting and more.

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.