I wonder if they can stream these ads based on region, state or zip code? I'm sure the initial roll out will be National in scope but it would be nice to have a Statewide GOP candidate have the targeting ability via YouTube.

YouTube videos to have 'overlay' ads
Wednesday, August 22, 2007 9:31 AM CDT

By Anick Jesdanun
Associated Press

NEW YORK -- Video advertising is coming to YouTube, but it won't be the type common at sites elsewhere. Starting Wednesday, the popular video-sharing site plans to feature semitransparent "overlay" ads at the bottom of selected video clips.

The ad disappears after about 10 seconds if the viewer does nothing; the featured clip automatically pauses if the viewer clicks on the overlay to launch the full pitch.

YouTube said it was trying to avoid pre-rolls that precede the main feature at sites like Microsoft Corp.'s MSN, which partners with The Associated Press on a video news service.

Shiva Rajaraman, product manager for YouTube, said internal tests show more than 70 percent of people give up when they see a pre-roll. By contrast, less than 10 percent decide to close an overlay, which they can exit by clicking on an "X" in a corner.

The overlay format also gives advertisers more flexibility, he said, because they aren't constrained to keeping a video ad at 15 or 30 seconds to avoid defection. Because a viewer chooses to watch, a video ad can run much longer - clicking on one pre-launch overlay launched a 2-minute trailer for "The Simpsons Movie."

YouTube, which Google Inc. bought last year for $1.76 billion, is still trying to justify its hefty sales price. Despite its huge audience, YouTube generated about $15 million in revenue last year, based on figures provided in Google's annual report.

Full article is here.