While I was out of the country, Google revealed the first concrete step in its attempt to monetize its $1.65 billion investment in YouTube. (Click here to read the article in The New York Times.) The transparent overlay ads which now appear on the bottom of some YouTube videos have been used in other online environments, but their presence represents an innovation in the context of the largest online video-sharing site.
Not everyone thinks that innovation is a positive one. Writing in the Financial Times (subscription required), Richard Waters expressed disappointment with the new ad format, not just because of “the deadening sensation instilled by a sense of creeping commercialization,” but also because “Google still seems a long way from finding a form of advertising that suits this (social) medium.” Disappointed he may be, but Google has to start somewhere. Even that behemoth needs to demonstrate a return on investment, and I for one think that the new format is a reasonable compromise between user experience and unrestricted ad exposure. As Richard rightly points out, it is hardly revolutionary, and it is not well-suited to most social networking sites, which are by their nature focused on personal communication, but it does seem suited to video sites.
As to complaining about “creeping commercialization,” I would argue that finding advertising on YouTube is nothing new. Prior to last week, marketing communication was present in the site’s natural format. Whether it was video of Ford’s new Verve concept car, consumer tributes to Coca-Cola, or an ad for Guinness, uploaded just because someone enjoyed it, marketing communication has always had a presence on YouTube.
Up until now, however, the viewer had unrestricted control over what they watched and what they did not. Now the new ads are taking on a more traditional in-your-face form, albeit on a limited basis. In order to avoid unfortunate juxtapositions of advertiser and unauthorized or undesirable content, the new ad format will only appear on video clips of content providers (media companies who have licensed their videos to YouTube). Furthermore, the transparent banner, if ignored, will disappear after 10 seconds. Hardly a dramatic imposition on the viewer.
What is interesting to me is that when someone does click on the overlay ad, the full-length version plays immediately, and the viewer only returns to the original video when they close the ad or it finishes. This does seem disruptive to the viewer experience, and I am intrigued as to why the ad does not play when the original video finishes. Even more interesting to me are the implications for ad placement. If the video content is too compelling then the ad overlay will likely be ignored. If the content is boring then it may attract fewer viewers but the ads may receive a higher click-through rate. That should present an interesting puzzle for optimization.
So what do you think of YouTube’s “new” ad format? Is it the solution to monetizing video-based social media, or is it simply a stop-gap measure? What might a better format be? Please let us know.
Tags: Millward Brown, Nigel Hollis, YouTube, online video, Google, Richard Waters
(19 votes, average: 2.84 out of 5)
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August 31st, 2007 at 8:20 am
Difficult to tell so early on Nigel. Sometimes I think the only reason people are OK with interruptive models of any kind is that they are used to them. This includes me I guess. I enjoyed the Mongolian post!