YouTube Introduces InVideo Ads

Last Updated Aug 22, 2007 5:31 PM EDT

YouTube Introduces InVideo AdsWhen Google bought YouTube for $1.65 billion last fall, the sale generated a huge amount of buzz, but also some head-scratching. At the time, YouTube was generating no revenue. Now that's changing. Yesterday Google announced that it's introducing ads within content videos -- a semi-transparent overlay over the bottom fifth of the screen. The viewer can choose to click on the overlay to pause the content and see a longer form version of the ad. If the viewer ignores the banner it disappears in about ten seconds.

Google's been studying how to integrate ads for almost a month. Why, after careful thought, did they choose this format? Shiva Rajaraman, YouTube product manager, explained to Advertising Age Magazine that tests found viewers abandon content more than 50% of the time when faced with a typical pre-video advertisement. The rate for the InVideo ads in less than 10%.

Google execs also noted that, for InVideo ads,

click-through rates are five to 10 times a typical standard display ad.... Three-quarters of those who clicked on an overlay watched the ad.
Perhaps the most important consideration for Google, however, was to avoid alienating viewers. As Eileen Naughton, Google's director of media platforms, explains to the NY Times, "What we have come up with is a user-controlled ad format that is engaging.... We want our users to be able to accept and choose what type of advertising they engage in." But advertisers are also enjoying the flexibility of the format. Because viewers click to watch, advertisers are able to make the ads longer then the 15 to 30 seconds of a typical pre-roll.

So will you be seeing advertising next time you go to YouTube to see stupid pet tricks or family vacation videos? No, says Advertising Age:

Much of the content that is monetized is professional or semi-professional content: videos from Warner Music Group and how-to footage produced by Ford Models TV. Ads will also run on user-generated content from those enrolled in YouTube's partner program, which requires partners to create good serial content and abide by copyright rules.
Is it possible that Google has found a way to please advertisers, viewers and content producers? That remains to be seen. It is nice however to see advertising that treats viewers as partners in a discussion rather than a passive audience who will somehow magically be driven to a product after being force-fed advertising content. After all, a viewer knows when he or she is in the market for (or at least can be tempted by) a new car or movie, or whether she or he is the target audience for some new arthritis medication. By treating viewers as participants in a conversation, rather than dim-witted marks to be outwitted or pummeled into submission, advertisers make their pitches both more effective and less aggravating.

(Image of Google YouTube logo by dannysullivan, CC 2.0)

  • Jessica Stillman On Twitter»

    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.