YouTube Ads: From Pre-roll to On a Roll

YouTube recently announced that it would continue testing to determine the best embedded advertising model for its site.

According to the Wall Street Journal, “You Tube has spent months testing different ad formats to figure out which models don’t alienate viewers. It found that viewers abandon videos that include pre-roll ads at a rate of more than 70%, so it ditched pre-roll commercials.”

YouTube’s next phase of testing: overlaid advertisements – semi-transparent ads that run on the bottom 20% of the video window. Ads appear 15 seconds into the clip and remain present, unless eliminated by the viewer, for 10 seconds.

If viewers click on these ads, the videos they are watching will pause, and the ad will launch.

YouTube is testing these ad models, and their rev-share terms, with 50 content partners, including Ford Models and Warner Group Corp. The CPM is said to be $20.

Why am I a fan of this latest ad model?

In a word: unobtrusive.

Overlaid ads are common on television – this is not a new promotions model for either viewers or advertisers to wrap their heads around.

Conversely, many advertisers are struggling with the constraints of making a compelling pre-roll commercial. It’s difficult to tell a story, relay a message and convey emotions or humour in a 30-second spot. All the more difficult in 10-15 seconds.

An uncompelling pre-roll commercial can be deadly not only for the advertiser, but also for the content partner.

What online video does best for entertainment brands:

(a) Gets your content in front of newbies, not just loyal fans. Online video is an easy, low-commitment way for a viewer to determine whether they want to park themselves in seats for your premiere.

Case in point: a friend of mine, recently visiting me from NYC, could not stop talking about her favorite new show, “Flight of the Concords”. Rather than download an entire episode or TiVo the show, I went to YouTube and watched an 8-minute clip of the first episode… then I watched the second 8-minute clip … then the third. I’m not yet completely hooked, but I’m willing to watch the second episode – off of YouTube.

(b) Takes your content viral.
Embedded code and “forward to a friend” buttons allow viewers to easily get your content in front of new eyeballs.

Friends don’t send friends pre-roll.

I, for one, have never forwarded content that included a pre-roll ad.

A recipient’s commitment level to viewing a forwarded video is often low. Remember, the recipient did not seek out the content – rather, he or she is watching the video on the recommendation of a friend.

If I don’t know whether I’ll like a video, why would I sit through an advertisement before the video? And why would I post an ad-laden video to my blog, let alone send it to a friend? If the value of the video is unknown, the likelihood of a viewer sitting through a pre-roll ad is low.

Which is why I’m betting on the success of overlaid advertisements – they unobtrusively spread their message without inhibiting either the viewing experience or the viral strength of online video.