YouTube Launches Pay-Per-View Ads

Advertisers on YouTube now have an option where they only pay when a viewer engages with the pre-roll ad. It’s a bold way to get digital marketers to move confidently into the medium since, like Google Paid Search, it’s more accountable. Here’s the YouTube blog post about this new format called “True View.”

Nalts the creator: Don't skip it please. Nalts the viewer: Yey I can skip it. Nalts the advertiser: sweet I only have to pay if they DON'T skip!?

Since most content is too short for the new option (similar to Hulu’s format, viewers get to pick a long preroll or several short ad interruptions), the more interesting of these two new offerings is the “instream” 5 & 15/30 format. You watch 5 seconds, and then you decide if you’ll continue watching the rest of the ad (15/30 seconds). That means creators/publishers will make no revenue on those who abandon. But the format will no doubt demand a higher premium (per click) for those who choose to engage.

This also means advertisers should do a better job of giving the consumer a REASON to continue. The first 5 seconds should certainly mention the brand (free exposure like the “reminder” effect of unclicked paid-search ads). But most advertisers who want deeper engagement or direct response will want to use those first 5 seconds to PITCH THE AD.

For instance, “find out why this kitten is crying” would compel me to finish the ad. Or “be one of the first to own what’s in this box” is a nice teaser. Eventually when the format is less novel, the “calls to continue” will need to be better.

So, yeah... if you choose to continue to watch the advertisement on NALTS videos, on your death bed you will receive total consciousness. So you have that going for you.

I believe Business Insider is right in predicting that Google will give advertisers “love” or charge them less if they’re getting a better pull-through on these ads… similar to how strong creative text ads on Google are rewarded with better positions. Jason Kinkaid raises a good point on TechCrunch:

…given how different this is from what most consumers are used to, it may be a bit too early to gauge how well these ads are actually working — users may be skeptical of hitting the skip button at all because they’ve never seen it before.

It should be obvious that this is an additive option not a replacement of your traditional 15-30 second preroll. If it was my choice, I’d move to it quickly a) to learn, and b) to see if there’s a better ROI on them, c) to take advantage of the novelty factor. Then again, I’m biased. I’m making money from these. So frankly, I hope you buy whatever’s most expensive. But I hope you also get an ROI on it.

11 thoughts on “YouTube Launches Pay-Per-View Ads”

  1. This is good for YouTube, and I wouldn’t say it’s bad for creators. We all want the best viewing experience for everyone. I think you make a great point about the advertisers making their pre-rolls more effective in this format. In fact, you may end up seeing more YouTubers in the pre-rolls a la Tobuscus! :D

  2. Pre-rolls have been a disaster so far. Typically a 15 second ad takes at least 30 seconds to start and then another minute or so to complete due to frequent stops. Meanwhile the video you want to watch is still loading in the background. The Associated Press channel has enormous problems with slow pre-rolls, but most pre-rolls take way too long on all channels. It would be smarter to offer 10 and 15 second spots and make sure they load quickly and efficiently and play without interruption. The click thru option is a good idea, but there’s no reason to watch a pre-roll a second time and so they become one-shot deals unless they’re really, really, really good!

  3. From an advertising perspective, I think putting the text “You can skip the ad in 0:05.” is stupid. Seems to me it’s suggesting that you should skip it whether you like the ad or not.

    Personally, I think I would seriously cut down on my YouTube watching if I had to watch ads regularly. Intrusive ads make me angry. Thankfully, I haven’t seen pre-rolls or the in-video pop up ads in a long time.

  4. It amazes me how people cry about the pre roll ads on YouTube, but have sat through commercials on TV for years. Everyone loves to come to YouTube for FREE and watch the FREE videos, and don’t care how or who pays for the service, and just assumes it should always be free with out interruptions. I would love to ask these people, what kind of business are you in, and what company do you work for, that’s product is so PERFECT and NECESSARY that marketing need not play a roll. YOU AND YOUR COMPANY AND PRODUCT MUST BE PERFECT.

  5. BuddhaCharlie, all the irritating commercials constantly interrupting programming is one of the main reasons I don’t own a TV. As a consumer, I don’t really give a damn about the needs of companies. I’m not interested in the crap they are selling, with very few exceptions. When advertising becomes too intrusive, I find a way to avoid it whether that means blocking the ads or simply not using the services or media with overbearing advertising. It’s the marketers’ job to make the advertising palatable. If they fail at their job, then their company gets nothing from me.

  6. Alexis, Well i do respect your position. There are people in my life who take that position as well. That being said your position, does not represent the majority, and that is why Google is the fastest growing company in history. And I am proud to be a part of the evolution.

  7. The problem with prerolls is that a) we grew up with online-video not requiring them, b) we don’t have a choice (I’d rather pay), c) they’re often poor creative, d) the ratio of ads/entertainment can be a bit extreme. That said, it’s fair to expect to endure some for of advertisers to incentivize creators, and I did see a non-trivial increase in my YouTube revenue when I turned them on a month or so ago (reluctantly). I like my ads woven in the content, relevant and entertaining.

  8. Well when all the talk started in 07 about a free google phone, I got exited. I have used google voice number as my only number since July 09 and love it. If google offered a service, where every time I make a call I would have to listen to a 15-20 second ad, I would have no problem with it. The exception would be allow 5-10 call per month ad free, thus in an emergency, and 911 would always be ad free. Also allow the option to pay for more ad free calls per month. YouTube then could offer an option to op out of the pre-rolls by paying a fee every month, to support the content providers and YouTube. Agreed we did grow up with free online video, however there was not as much content provided either. But that is where it seems like there is a push to more professional content. I think everyone seems to thing that all pre rolls will have the option of skip, and that does not seem to be the case, in fact it looks like a content provider has to opt into the True View right now, correct me if I am wrong, but that is what I read. Nalts you know more than me and everyone here about marketing, but the idea to be able to skip the ads would be like a billboard company allowing drivers to say out loud, we don’t want to see the ad, and then when we pass them, we would not see the great big cheeseburger or whatever, sure the advertiser would not be charged, but really. Another way of looking at it, again just my thoughts, it would be like you and me being able to say that we only want people who like our videos to watch them. Negative publicity is a great sales strategy. I have always hated XBox, but because I was forced to watch the recent pre rolls about Kinect and I was forced to watch it in SHAYTARDS. I got my daughter all exited about it, and now she is getting one for christmas, truth is, I wanted it so bad that I created excitement. I think in a few years, the content provider and the consumer will look at this in a whole different light, kind of like cats on skate boards.

    BuddhaCharlie

  9. I’ve personally never been a fan of pre-rolls, and most of the time when I see one on a short form video I will actually hit the back button and not watch the video. For me, I think that it really does interrupt the flow of everything. It is not the same viewing experience as traditional television so I can’t really follow the methodology. Or maybe I’m just vehemently opposed, I don’t know.

    That being said that’s a personal choice I make, and it doesn’t work the same for everyone. Which is why some variety is nice, and the flexibility for the advertisers is I’m sure a welcome change.

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