Google AdWords and Yahoo! are both now displaying video ads. You can see screen shots here and here.

I think you’re going to start seeing more and more of this. We’ve expected it for some time. The only question was, what would it look like? Well, now we can see.

It looks just like a text ad with a plus sign at the bottom that expands into the video view. Then you can watch the video right there in the SERP. I think the big question is going to be how many people will actually click to watch the video? If text ads are any indication, it will likely be quite low. But advertisers will know that anyone who does click to watch the video is a targeted lead. And that’s what advertisers are geared to pay for - targeted leads.

I expect pay per video prices to start off low then crawl upwards and more and more advertisers learn to use them. It will likely take a year, maybe two at the most, before the pay per video prices reach a level comparable to pay per click prices. And, who dares to mention PPV fraud?

Pay per click advertising took the Internet marketing world by storm when first introduced and since then the world hasn’t been the same. Small companies took and early lead but it didn’t take Google, the search engine king, long to seize the opportunity and take control of the market. Just as in search, everyone else was relegated to the field of following.

Now, it seems, that pay per video could be the next product to come along and seize the marketing world.

With pay per video, searchers will be able to watch your marketing videos and you pay only when they click to watch. I think Google is setting itself up to dominate this market as well. Google Universal allows searchers to receive video results alongside other results for their queries and on some searches, you can actually watch a video embedded in Google’s SERPs. I believe this is a forerunner of what is to come with pay per video.

Once searchers have already gotten use to the SERP-embedded videos then they’ll be more amenable to the videos in the sponsored search area of the SERPs. It’s possible that those videos might actually appear in the middle of the SERPs, say halfway down the page, so that Google doesn’t have to replace its contextual ads. If that is the case then putting those videos in the Universal results is a bright idea.

We pay per video is coming. How long it will take to catch on and whether or not Google will take the early lead as it did with search and pay per click, now that’s another story. I’m betting it is highly possible.