SubscribeYouTube Introduces Ads
Posted in IPTV, Advertising, News on August 24th, 2007. By Eduard F. Vinyamata.
After months of testing different ad models, last Tuesday YouTube introduced their chosen ad format. This MCH article is a wrap up of the most important facts, opinions and conclusions that have been written so far about YouTube’s entry into the world of video advertising.
This is how YouTube does it: they insert a 10 second, 80% transparency overlay on the lower 5th part of the target content. This overlay enters 15 seconds past the start of the video and minimizes if the user doesn’t click it. In case of a click another window pops up inside the playing window. The new, small window contains the ad, which begins playing while at the same time it stops the main content. See this article for a detailed description with pictures.
The ads will have a flat rate of $20 for every 1000 times they are displayed and will only be available on the YouTube website itself, not on embedded website or external aggregators such as the iPhone or the Apple TV. Ads will initially be available only for the USA and for now they are also limited to current YouTube content partners.
Taking into account all this key data plus some assumptions, Henry Blodget from Silicon Alley Insider has come up with and analysis of YouTube’s future revenue potential. In conclusion, there isn’t much to write home about, at least for a few years…
Some would argue (see this article’s comments) that online ads are only effective (and acceptable) if they are fully context sensitive. Take for example, Eileen Naughton, Google’s director of media platforms (source):
“Ads need to provide value to the user community. We’ve proved over and over again on Google that ads are really useful information when users raise their hands and engage with them.”
In this regard however YouTube will only factor in 4 values of context: location, demographics, time of day and genre of the video. Even though YouTube promises future better ad contextualization, today, compared to Google, YouTube ads are quite unfocused. The proof is that most YouTube users aren’t exactly engaged about the changes. One of the important reasons might be that so far, YouTube has failed to deliver on it’s potential to monetize User Generated Content.
Just a few hours after YouTube’s announcement, VideoEgg commented in this Wired interview that they have a pending patent that could sometime in the future affect YouTube’s advertising proposal. Actually, YouTube’s announcement started a little discussion among video hosting websites about which of them was the first to think about the clickable overlay ads. The article includes a very interesting email from one of these websites. Brightcove’s CEO writes that despite all their efforts to push technologies such as the overlay ads, the advertising community is focused on two things only: preroll ads (challenging the negative impact they produce) and leveraging existing creative and buying patterns. In other words, the advertising community wants to keep on doing what they know how to do best: push ads as if it was 1987.
In conclusion, and if we don’t count possible future patent nightmares, it doesn’t matter who invented overlay ads. Text link ads weren’t Google’s idea, but who ended up making billions with them?
Related: How Ads Affect Our Memory.
A new study suggests that marketers shouldn’t fixate on the number of people who click on ads. According to the research, just seeing an ad on a Web page can impact memory.
2 Comments
RSS feed for comments on this post. TrackBack URL
[…] Music, but also clothing, food, furniture…The concept (and the technology) are also ready for video. Apple may have just brought to the spotlight a renewed, less intrusive and evident way of product placement. Should this take off thanks to the traction the “iPod Revolution” might give it, it could very well acquire an important role in the way media products and hosts, like YouTube, are payed for in the future. Isn’t this much more interesting than say…video overlays? […]
Pingback by Product Placement 2.0 on September 7, 2007
[…] to come up with a business model, to monetize Internet Video: it still hasn’t happened. Their advertisement proposals have so far been poor at best. Maybe, as if to celebrate their first birthday as a Google company […]
Pingback by YouTube & Joost, One Year Later on October 5, 2007