The wide-open business of advertising in online videos just got a little less wide-open, as Google’s launch of in-video ads on YouTube has established a de facto standard, validating an overlay format a number of startups had already rolled out.

The ads initially appear as translucent banners overlaid on the bottom portion of videos. Viewers can click the overlays to pause the main video and replace it with either a video ad or an interactive Flash ad, depending on the advertiser. Or they can click a button to make the banner disappear, or simply ignore the banner, which will vanish after 10 seconds. If they choose to click, they can bail out of the resulting video or interactive ad at any time and return to the YouTube video they were originally watching.

Google’s move addresses a problem that’s plagued the online video space: how to advertise without driving away viewers. Hitherto the most common format, the “preroll” ad, a long, television-style commercial tacked on to the beginning of a video, had raised the ire of web surfers.

YouTube had grown to be the leader in the online-video space in part because of its ad-free format, and since buying the company Google had been cautious about changing that model. But after extensive testing, Google thinks the new ad formats are unobtrusive. Conscious of viewers’ distaste for preroll ads, Google has arranged things so that the overlays appear no earlier than 15 seconds into a video.

Startups such as adap.TV, VideoEgg, ScanScout, and YuMe Networks—intermediaries that bring video publishers and advertisers together—have found similar results with alternatives to the preroll, recently introducing similar overlay ads. Google’s endorsement of the overlay approach should provide assurances to the clients of these startups.

For now Google is selling ad space only in YouTube’s partner videos—that is, licensed professional content. Unanswered is the question of whether YouTube will run the new ads in user-generated videos. Advertisers have been wary of user generated spots because of their unpredictability and the potential for violent or offensive material. Along the same lines, Google will not sell space for the new video ads by way of an auction format—an approach the company made famous with its AdSense and AdWords programs. The ad space will be sold by a human sales force.

ScanScout CEO Doug McFarland said his company’s ability to safely place overlay-style ads in user-generated videos differentiates it from YouTube. ScanScout’s BrandProtector provides automated vetting of audio and video content to pull out potentially negative material, Mr. McFarland said.

YouTube ads that have run in the testing phase include spots for Universal Studios' Evan Almighty, Twentieth Century Fox's The Simpsons Movie, and NewLine's Hairspray. BMW has also been represented, along with about 15 other companies, according to ClickZ. In tests, the new ads have shown five to 10 times better click-through rates than banner ads, YouTube said.

Google will charge YouTube advertisers based on the number of people who see the overlays, regardless of whether those viewers click on them. The company will charge $20 per thousand views.