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Google starting testing the idea back on February 25th. Now it’s officially launched in Beta and here’s a quick scoop about how the Video AdSense ads will work within your AdWords account.

The Beta program will be available to all through the AdWords interface “very soon.” It works just like the image ad program, and you can access the management and upload it all through AdWords Content Match area.

You supply creative in 250X250; 300X250; or 336X280 formats. CPM charges are available, but you can also pay by CPC, just like image or text ads. A click is when someone clicks “play” on the video.

Videos must be no longer than 2 minutes and must adhere to current editorial guidelines. They can be made in:
AVI
ASF
Quicktime
Windows Media
Mpeg

All videos will be converted to flash before being distributed to the network.

Here’s an article that talks about the new offering from a “Google strategy” perspective.