In an interesting update on the preroll formats on the world’s largest video site, Gigaom reports that 60% of prerolls are “skippable.” After 5 seconds the viewer can jump past the ad, and advertisers pay nothing.
The piece also quoted CEO Larry Page as saying that growth wouldn’t necessarily come at the expense of TV budgets, as advertisers generally weren’t shifting spend from other parts of their video budgets when committing to YouTube.
Some notes on this:
This means that only 40% of ads are traditional 30-second prerolls.
Video creators (Partners) gain no revenue from this format except when viewers sit through the whole ad (like a movie trailer).
I’d expect the majority are skipped.
The videos command a higher “cost per view” than YouTube would receive for forced banners.
I would suspect that advertisers are penalized (with maybe a higher cost per view) if the ads are viewed far under the average. This is how paid search works, where advertisers must pay a higher cost-per-click when the URL is deemed less relevant (as observed from bounce and return)
The implication to marketers is clear: get your message into the first 5 seconds, and compel viewers to stay (using entertainment instead of straight promotion).
Superbowl advertisers get ready: this is a powerful way to amplify TV spends