Google AdWords Video Ads expanding

I know this feature is not new and are in a limited release but it appears that they are starting to show up more frequently in search results and often appearing to be shown on very generic search queries such as “movies” as shown below.

YouTube AdWordsThe ads are fairly cool as the click on the title takes the visitor to the target website and a click on the play button creates a theater video player experience.  The question I would have about the model is they are apparently charged at a flat rate and you don’t actually enter any bids so it seems a Ad feature very much built around trust.

I wonder how Google will continue to change it’s model from CPM/CPC to a hybrid Cost-Per-Action model and if there is any downside to their “flat rate” such as shaping of views once they hit the advised number of plays.

What is interesting about this ad is that it’s not very well targeted, I was doing a search on Google.com.au and both the release date and the campaign URL is Australian specific but I was doing the search from a Amsterdam IP address. So I question the value of these types of ads if they are not able to be that well targeted.

So has anyone had any experience with the new media ad units and any guidance on costs or engagement rates?