Source: adwords.google.com

When Google purchased YouTube for $1.65 billion, conventional reasoning suggested that the search giant had grand plans to monetize the video content with advertising. As we sit upon the precipice of 2007, Google has begun testing in-stream advertising methods geared at just such a practice.

We all knew this day was coming, a day when Google would finally step in to the foray of online video advertising. It’s been speculated, analyzed, and talked into the ground, and now it’s all finally beginning to take shape.

How do they work?

When a video ad is served to a page, it will be displayed as a static opening image until the user interacts with the ad. Once the user clicks the play button or the opening image, the video will begin playing within the ad space. If the user clicks the display URL at the bottom of the ad, they will automatically be taken to the advertiser’s website. We’ll report a clickthrough whenever a user clicks the display URL and visits the advertiser’s site, rather than when a user clicks the play button or image.

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