YouTube's "New" Ads

In the past few days there has been a bunch of buzz surrounding online video advertising because Google's mega-mammoth brand in the space, YouTube, (which they bought 10 months ago for $1.65 billion) initiated "semi-transparent overlay ads". With room for variation it's a banner that appears at the bottom of the video screen and offers the option of linking to the advertiser's web site. YouTube calls them "In Video"

Above is a screenshot of an ad for the movie "Hairspray" on a Ford Models TV video. Hairspray, hairdresser, young women, that's targeting. Unfortunately the screenshot is one that appeared in the New York Times because I couldn't find an example of an ad on the YouTube site. Personally I think the web site for Hairspray the movie a much bigger brand than Ford Models TV but that's beside the point. FordModels.tv is one of about 1,000 large and small media partners that have licensed their videos to YouTube and will split the ad revenue.

The sponsorship model isn't new, look at blip.tv who split their advertising revenue 50/50 with the shows they host on their site. Nor is the creative, one of the online video advertising pioneers VideoEgg claims to have engineered it. VideoEgg is an ad network of varied video sites with a robust and impressive web presence. They offer much better samples of this type of advertising.

YouTube/Google charges the advertisers $20 for every 1,000 times the ads are displayed (CPM = cost per thousand). The revenues are then split with the media partners. Interesting that on YouTube unlike other online ad placements the amount of times each video has been viewed and how viewers feel about the video is public knowledge. The YouTube audience is incredibly fragmented, it's quite an accomplishment to be as popular as LonelyGirl for example.

This particular Ford Model TV video has been seen 304,661. So, if YouTube/Google the ad placement for the entire 304,661 times Hairspray would have only spent $6,093 but the video is 3 months old. So who knows how many people viewed it yesterday but there were 15 comments about the advertising itself. Many were upset that they couldn't see it. One commenter said there was t he possibility of interesting juxtapositions of advertising on content based on Google AdSense key words, like Nestle on Chocolate Rain (a viral video that made the rounds recently).

With 55.1 million unique visitors who spent an average of 49 minutes and 59 seconds on the site during July, YouTube is the most popular online video site, according to Nielsen/ NetRatings NetView. YouTube has spent months testing different ad formats to figure out which models wouldn't alienate its 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.

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