In a significant first, YouTube has decided to let advertisers inject their messages inside the video frame for select content on its site (see ClickZ or MediaPost). For an interesting piece that projects revenues for YouTube, see this post by Silicon Valley Insider.
For an example of the ad, see this Smosh video and watch Homer Simpson at 15 seconds in. To see another similar demo (unrelated to YouTube), check out this site by Adjustables (which allows you to drop in various embedded ads).
This is huge news, and here’s why:
- It’s a new ad format that I believe balances marketing needs with user experience. As a creator and marketer, I love them. And as a viewer, I can more than tolerate them. They’re not interruptions, and allow me to dig-in or continue with my viewing (as opposed to horrendously long pre-rolls). But they’re also not lost in left field: like basement-price banners that sit miles from a video and get few views much less clicks. Don’t get me wrong- these banner ads may still be worthwhile for marketers because the CPM (cost per thousand) is so cost-effective.
- This exponentially raises the revenue that YouTube can make per video view. Grant- I’m biased in this enthusiasm since I am a YouTube partner. $20 CPM is a fair price.
- Ultimately, it shows that YouTube/Google is turning the corner on this age-old debate about advertising vs. community. YouTube has always been about community not commercialization. And that’s not a bad thing, but they happen to be in business to make money. Google also tends to build new product/service solutions without considering the advertising implications. Then eventually they figure out how to monetize it.
Some of the community will, of course, object to any new ad format. But ultimately this increases the sustainability of online-video and is a good thing for those viewers who want to retain access to free, quality content.
Now for some key points about the ads — lifted directly from the ClickZ article:
- The new offering, dubbed InVideo Ads, mimics the clickable ad overlays introduced in recent months on ad networks like VideoEgg and YuMe.
- Ad product consists of animated bars that obscure the bottom 20 percent of the video frame for a given clip. They initiate 15 seconds after the beginning of a clip
- InVideo overlays are “80 percent transparent” and remain visible for approximately 10 seconds before shrinking to a small button users can later click to view the marketing message again.
- YouTube has set a $20 CPM for InVideo ad buys consisting of an InVideo ad accompanied by a tiny in-player companion ad and an adjacent in-page unit.
- Clicking on an overlay ad pauses the current video and launches one of two experiences brands can choose between. One is a new clip superimposed over the video in progress via a player-within-a-player interface. When the paid clip ends or is closed, the original automatically picks up where it left off. Shiva Rajaraman, YouTube Product Manager, said 76 percent of those who click the overlay and watch the video ad viewed the entire trailer for NewLine’s “Hairspray.”
- The other option is a Flash-based interactive experience in which the user is invited to navigate an interactive menu. Warner Bros. created such a unit where users can flip through selected album covers (click for example).
During YouTube’s research process, Rajaraman said, “One of the key things we found, not surprisingly, is that when a video is playing on YouTube their attention is [locked in to the video frame]. When we came up with an ad format, we realized that… it needs to be in the player.”
Yet when the Google-owned video portal tested pre-roll placements, YouTube users abandoned video clips at a more than 50 percent rate. The overlay, by contrast, results in an abandonment rate under 10 percent. Not only that, but click rates are five to 10 times greater than standard display click-to-video ads, according to Rajaraman.