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Video Ads Mark Shift in Google

Google today introduced click-to-play video ads in the U.S., Canada, and Japan and, in the process, shook up its business model and identity.

An analyst applauded the new offering for its brand-making capability, but warned that Google will have to embrace more portal-like user measurements for it to succeed.

And, indeed, Google will now measure how long users interact with the video ads.

In an e-mail to internetnews.com, Google said the video ads will run on the AdWords auction model and can be placed on specific sites or on sites that contain certain contextual keywords. The videos will last up to two minutes.

Google said advertisers will be charged per click or per impression.

Charging per "impression" marks a shift for Google because that represents how long users interact with the video ads.

Time users spend on a page is a metric called "engagement," and it has long been prized by portals such as Yahoo and ignored by Google.

"We want to be a switchboard," Google Finance product manager Katie Stanton told internetnews.com when her product launched earlier this year.

"What we've done is crawled and extracted data from the Web and linked off to those sites to send users to a place that goes really deep," Stanton said. "We actually don't track how long a user stays on our site."

But now, by charging per impression, Google has to measure how long users spend on at least one part of Google's network.

And it is about time, Forrester Research Analyst Shar VanBoskirk told internetnews.com.

Google owes as much to their advertisers, she said.

"The challenge for any advertiser is trying to figure out how much they're getting out of the investment they're putting in," she said.

Traditionally, Google has done that for its advertising customers by charging them per click.

"But in this case," VanBoskirk said. "It may not be a click that's actually generating the value to the advertiser. "

That's because video advertising is most useful for brand advertising.

An ad aimed at shaping a consumer's sense of a brand is not necessarily a failed advertisement if that consumer does not click through it to arrive on the advertiser's site.

"It may be about 'Do you feel differently about the brand now, is there some sort of attitude adjustment, some sort of affinity you now feel toward the brand?'" VanBoskirk said.

Those changes are what brand advertisers pay for, but they are hard to measure.

Online media companies, or portals such as Yahoo, have long measured the amount of time users spend on their sites and then used that data to sell themselves to advertisers.

By charging per impression, Google will do the same.

The question now will be whether Google is tempted to break out of its mold and create content to keep users on their pages longer. The incentive is there.

The question is not whether Google is a portal, VanBoskirk said.

"I don't know if they say they're trying not to be a portal. But I certainly think they are and I certainly think they should be if that's not the direction they're going."