YouTube Opens Up Banner Ad Overlays to Everyone

Expect those yellow teeth ads to pop up on top of your YouTube videos any day now, as Google (s GOOG) has added an option to build display ad overlays within its Display Ad Builder, making it possible for AdWords customers to easily generate and run overlays that make use of their own imagery.

YouTube has been running ad overlays for close to three years now, calling them “one of the most effective ad formats.” However, generating those ads was previously fairly complex, and even many large advertisers have so far opted for text overlays instead of display ads. The new self-serve ad generator could lead to a huge number of display ads finding their way to YouTube, but also significantly increase monetization for the site, which could make as much as $1 billion in 2011, according to a recent Citigroup estimate.

AdWords customers can use Google’s Display Ad Builder to upload graphics sized 480×70 and then book these banners for regions, categories or even a specific video. Display overlays can be booked either on a cost-per-click or CPM basis.

The move towards self-serve advertising on YouTube doesn’t come as a total surprise: GoRumors uncovered a patent application for such a feature in January. In that application, Google wrote:

“The conventional techniques for development of such multimedia advertisements are complex, requiring resources beyond the means of many small to medium-sized organizations.”

The new ad generator, on the other hand, is squarely targeted at small advertisers. YouTube’s blog post announcing the new self-serve option specifically mentions small businesses as its target audience, musing that this would be a great way for a small beauty products outlet to “create an overlay ad and then run it on popular fashion and beauty videos.”

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