YouTube’s Monetization Answer: Lower Fifths
Apparently YouTube has decided that animated overlay ads are the way to go in online video, at least for now. Their solution: in-stream ads on the lower fifth of partner videos for a $20 CPM.
The ad format, (click on the screenshot above to see it in action) in an example that is very relevant - tying a trailer for the film Hairspray with a Ford Models hairstyling video - is pretty noninvasive, and a good first step, but how many partners will actually provide enough content and generate the views to make these ads worthwhile?
It seems to me that a site like YouTube, with their massive bandwidth costs and 4th ranked traffic overall, would be more aggressive and try to monetize more effectively.
Apparently Google has bigger plans in store for YouTube. A New York Times article today quotes Eileen Naughton, Google’s director for media platforms as saying “We want our users to be able to accept and choose what type of advertising they engage in.”
Cheers to them for being so cautious to avoid irritating viewers but I would love to get a hold of their long term monetization strategy.
August 22nd, 2007 at 8:43 am
I was actually looking forward to seeing the ad. Unfortunately I was not able to see it. I tried both signed in and not signed in. I’m wondering if it’s a geofencing feature, that they only show the ads to US viewers.
August 22nd, 2007 at 9:29 am
Maybe it is geographic - The ad would show about 10 seconds into the clip and there is a yellow marker on the timeline specifying that it is there. This was an example used by NYT and will appear every time the video is played.
Anyone else outside the US unable to view it?
August 22nd, 2007 at 2:38 pm
Great post! I agree completely with your monetization comments. Did you see the quotes from the product manager in AdWeeK????
“(T)hanks to YouTube’s high volume of video views per day, users will rarely see ads) Seth said. ‘We’re hoping it will be infrequent enough they won’t notice.’”
Ads infrequent enough that users won’t notice? What brands or advertisers would go for that pitch? It looks like Google/YouTube major market differentiator is running ads as infrequently as possible. I’m sure their advertising partners will appreciate that.
My issue is that it is not about frequency of the ads running; it is about content of the ads. Consumers want relevant contextual ads (see recent OPA studies). But Google/YouTube filters only covers a few market parameters sex and age; geography; time of day; and video genre. ScanScout has three-way, metadata, aural, and visual recognition, tagging and filtering system that matches contextually relevant ads with all types of video media, including UGC video media. Google/YouTube’s present model isn’t even in the same ballpark.
That’s probably why Google/YouTube isn’t going to run in-video ads with its UGC content—without having a Google person reviewing and approving every UGC clip, brands and advertisers have no guarantee that the aligned UGC content won’t be offensive. As far as I know, only ScanScout has come up with meaningful technology-driven brand protection that blocks ads from being served with specific content parameters set by the brand or agency.