Big Names On Board With Google Video

Included among the new partners are the National Basketball Association (NBA); CondeNet's Epicurious.com and Style.com; The Wall Street Journal Online; and LX.tv.

In January, Google confirmed that Sony BMG Music Entertainment and Warner Music Group were also participating in the program. Last August, Google announced a similar trial with Viacom's MTV Networks, through which it distributed MTV video clips and shows -- along with ads -- to targeted Web sites. However, that trial has reportedly been discontinued.

An Expanding Reach

"It allows users to see quality video content that they are interested in on the sites that they visit regularly," he said. "It provides an effective way for advertisers to reach their target customers with rich, engaging messaging. It provides additional revenue sources and broader distribution for participating content owners. And it provides engaging, relevant content for publishers while offering an incremental revenue opportunity."

As in past tests, the advertising revenue is split three ways among the content owner, the Web site publisher and Google.

McCormick declined to disclose the exact revenue share, but he said that ads will be billed on a cost-per-thousand-impressions (CPM) model.

Focus on Branding

For Google, the arrangement may also represent a shift into online branding , with a whole new group of potential advertisers.

"Google has been focused on cost-per-click ads with a call to action," Charlene Li, vice president and principal analyst for Forrester Research, told TechNewsWorld. "This is more oriented toward branding. Google has new capabilities and new staff who understand the branding world, not just direct marketing . It's a great way for them to move into the TV space."

By starting in the relatively untapped space of online video ads, which is "growing like gangbusters," Li claims, Google can develop a library of online video ads and then offer them to TV stations.

"Google is going after the largest advertisers. They're starting online, where they can dominate -- and then they can use that strength to move into television space," Li added.

Strong Future in Video

"We're starting to see more rich media and video on Web sites, and that's the way of the Internet," said Greg Sterling, principal analyst with Sterling Market Intelligence.

"It's largely a visual medium, and more imagery and video will be disseminated. I think there will be very high demand for video," he told TechNewsWorld.

Google has an advantage, in that it already has a network. "The Internet provides a targeted capability for branding messages," Stirling pointed out. "You can add call-to-action messages that you can't use in other media. It's an interesting opportunity in the Internet context that you don't have otherwise."

Video is clearly a branding medium, he said. "Google is trying to move upstream and to get into larger marketers' branding budgets."

Brand Sensitivity Issues?

"Google has been widely reported as trying to crack the video nut, and this is more indication they're pretty serious," Andrew Frank, research director at Gartner (NYSE: IT) , told TechNewsWorld. "What's interesting is that this is a contextual placement type of deal -- Google will try to use its secret weapon of matching ads with the content of the site, and that raises all kinds of questions."

For instance, will the distributed videos appear anywhere that AdSense ads appear? If so, that might raise some brand sensitivity issues. "I'm sure Google will be very careful, but the more careful they are, the more questions are raised about how big they can scale this," Frank said. "There are a lot of moving parts to an arrangement like this."