Google today announced video ad units for AdWords. This ad format will be displayed on content sites, but nowhere on Google itself. Michael Arrington thinks it won't get off the ground -- he makes some good points and could very well be right.
However, I somewhat disagree. Like most Google services, its adoption will probably be slow, but I think there is enough value in this new format to get it off the ground and pick up speed.
What value am I talking about? Well, thinking as a current AdWords advertiser, I would gladly provide Google rich video advertisements that promote my company. Granted, it's harder to produce a video advertisement and only a fraction of advertisers would even know how to make one, but for those who do (companies serious about advertising often have a marketing department capable of handling the dirty work), it's an effective way to advertise.
Even if the ads dont lead to sales directly, it could be a cheap way to build brand recognition. Advertisers don't pay for people to watch the video -- only click throughs. Even if no money changes hands, users will often remember "commercials" better than neatly blended in text on a website.
As an average AdSense publisher, why not allow videos to be displayed? There will always be publishers who prefer text links -- myself included -- but there are a lot who are simply interested in making money and don't care much about what kind of ad units are displayed. Besides, having a box that resembles an embedded video could have some pretty impressive click through ratios.
From the viewpoint of someone who is exposed to these ads, I don't see the majority being hugely annoyed by them. These ads require clicking the play button if you want to watch the video, otherwise it's basically a static image.
In my perspective, there is little wrong with what Google is doing with their video ad units -- in fact, I think it's great for all parties involved.