Google earned kudos in September 2006 for enticing video sharing site YouTube away from its rivals and into the Googleplex. But almost immediately, the question came up: How do you earn money from a free site that streams 1.9 billion minutes of video a month?
Ads were the obvious answer, but YouTube isn’t exactly an ad-friendly environment. Some of the video content is professionally produced, but some of that has copyright concerns. The rest is quirky, user-generated clips most marketers wouldn’t want to be near.
Then there’s the linked questions of ad format and user acceptance. Viewers are coming to YouTube for entertainment — and at the rate of 130 million unique visitors a month. Running a 30-second ad before a two-minute clip (known as a “pre-roll” ad) delays that gratification and irks the customers. According to Google’s research, 70% of users closed video content when they encountered a pre-roll ad.
Now Google thinks it may have a solution with InVideo, a platform it began testing in August with select YouTube advertisers and content providers. When a user clicks to a YouTube clip with an InVideo ad, the video starts to play at once. Within 15 seconds, an overlay bar appears covering the bottom 20% of the player screen, possibly with animation or interaction. After 10 seconds, that overlay reduces to a small button that the user can click during the video.
Clicking on either the bar or the button pauses the video and brings the user into the ad. InVideo is testing two kinds of experiences: letting users watch a player-in-player video ad or taking them into a more interactive experience. In either case, they can click out of the ad content at any time and return to the paused video.
The InVideo platform went into test with a lot of entertainment brands, such as Universals Studios’ “Evan Almighty” as well as music videos from Warner Music Group and Roadrunner Records, and BMW’s 3 Series convertible. To keep the ad environment hospitable and free of copyright tangles, the ad tests are only running on content from selected suppliers.
The ads are being sold on select content sites within YouTube — the company’s admission that advertisers won’t want to appear next to most of YouTube’s content, which is either copyrighted, risqué or just plain dumb. In many cases, the tests have matched ad to content, for example linking an overlay for New Line Cinema’s “Hairspray” to a styling how-to video from modeling agency Ford Model Inc.
“When it comes to video ads on non-professional content, we see a large drop-off in audience when we ask them to watch a 15-second video before the clip,” says Ian Shafer, founder and CEO of marketing agency Deep Focus. “This overlay option is a much more palatable one.”
Other video sites and networks are already offering virtually the same type of overlay ads, including YuMe Networks, Adbrite, BrightCove and the VideoEgg Network. In fact, since the YouTube test announcement, VideoEgg has been running a header ad on its home site that fingers Google as late to the video-overlay party. “We’re delighted with all the talk about new video ad formats and who invented the overlay,” it reads. “Advertisers are taking notice. Let’s get on with it…”
VideoEgg chief marketing officer Troy Young points out that his network has run more than 250 overlay-ad campaigns with 100 brands in the last year. “In the on-demand world that is the Internet, advertising is either entertaining or helpful or both, and consumers elect to what degree they want to spend time with it,” he says. “Overlay ads offer them control over ad viewing.”
About a year ago, VideoEgg rolled virtually the same type of overlay link YouTube is testing. (At VideoEgg, it’s a “ticker” ad.) In a company demo, the video clip launches and a few seconds in, the viewer sees an arresting tagline, “Lose the Manboobs,” with a Flash animation of runners. Click on the ticker and you’re taken to a 30-second video ad for Nike Plus, the running shoe-and-iPod Nano combo. Viewers can click through the ad to the Nikeplus.com Web site, or they can return to the paused clip and resume viewing. Ad frequencies are capped, so after a few viewings the ticker ads don’t display any more.
Video ads on YouTube will pose special challenges, many observers point out, because the site grew to popularity ad-free. Early comment to the official YouTube blog shows that some viewers aren’t taking the ads without complaints.
It’s worth noting that early users also raised a ruckus when ads started appearing on the home pages of Web e-mail services from Hotmail, Google and Yahoo!. Now, few people blink at those ads. Most see them as the cost of keeping the service free.
Google’s relative lack of brand-advertising experience might pose a larger long-term problem. “YouTube can be a fantastic branding and awareness engine, but that’s not something Google has been particularly great at monetizing,” Schafer says. “Google has been great at direct response, sparse white pages, utility and practicality. But they haven’t been able to create equally great awareness-driving campaigns.”
At any rate, the time of year seems right for experimenting with ads inside YouTube clips. “Kids are going back to school, they’re on Facebook and MySpace and the fall TV season is starting,” says Karen Sharpe, founder and CEO of interactive agency Sharpe Partners. “All their [YouTube’s] competitors are right out there, so it should be a very fair test.”
For more articles on interactive marketing, go to promomagazine.com/interactivemarketing
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