Google Video Ads - Google is Still Smarter Than the Masses
Posted by Mike Bijon May 24, 2006
Neither Michael Arrington at TechCrunch nor Seamus McCauley at Virtual Economics think Google’s new AdSense PPC video ads were worth doing. I strongly disagree. I think Michael and Seamus are missing two major reasons why PPC video ads are at least an obvious, if not smart, use of the AdSense system.
First, the rigid mathematics of Google’s AdSense algorithm are typically smarter than the masses. Just like the house eventually wins in casino gambling, Google eventually beats other advertisers in revenue by not trying to outsmart itself and letting mathematics calculate the value of displaying an add based on historical factors including both the PPC bid and the CTR (click though rate). The AdSense algorithm is the whole reason Google makes so much more from simple text ads than traditional “inventory/campaign publishers” but is still affordable to small publishers who target a narrow market with it - it’s the action of that whole Long Tail thing Michael mentions every now and again. Video ads won’t be exempt from the AdSense algorithm either, so we may not see very many of them but the ones we do see will be out-earning any other ads for Google.
Second, Mike and Seamus are underestimating the creativity and ingenuity of Google’s advertising customers. Even at $44 per airing in a major metropolitan area a “real” TV commercial needs to show quite a few times before it gets captured and viralized like the Honda “cogs” ad did, plus how do you know that an ad will attract as much attention as your ad-guys want it to? I think Google’s PPC video ads will prove to be great ways to both introduce viral promotional videos into the market and to test the attention-grabbing power of an ad less-expensively than with broadcast media. Given Michael’s penchant for new media and that he is “look(ing) forward to the day that a show, ignored by the networks, first decides to launch itself on iTunes and go straight to consumers” I’m surprised he isn’t also rooting for an ingeious video ad to go viral without ever seeing the light of a TV broadcast.
Of course, Google’s huge troop of smart engineers and pool of cheap bandwidth is what allows them to expiriment with these click-to-call and video ads years before they’re likely to popular, instead of always being a market reactionary (yes, they didn’t do AdSense until their customers said so). I do have misgivings about why Google won’t allow AdSense publishers (the people showing the ads on their sites) with small- and medium-size sites to stop the video ads from showing, like they can already choose to stop image and Flash banner ads from showing. Since Google’s algorithm and data pool is usually smarter than the masses they need to respect the web sites of their customers, publishers in this case, and take advantage of their ingenuity instead of risking offending them.
Mike Bijon: I work as senior technology manager and technologist for 
It’s a fair point - if you asked me to take a bet on who was smarter, me or the massed ranks of programmers and strategists in Mountain View who’ve built a $116 billion company, my money’s on the guys with the Lear Jet. Perhaps they’re onto something I haven’t spotted. But I’m not so sure the Honda Cogs comparison helps your case - isn’t the point of Cogs that people were spreading it virally and voluntarilly as a piece of online video art? If companies can create ads like Cogs or - my own personal favourite - Sony Bravia’s multicoloured balls bouncing down the streets of San Francisco, that are just so damned beautiful people will pass them on to their friends, why is are their creators going to pay Google a PPC rate to get them in front of people?