Content Matters

With a measured approach, akin to the way it first introduced advertising on its search engine, Google is now introducing advertising on YouTube.

The new format is a semi-transparent overlay at the bottom of the screen, the same positioning news shows use for their scroll.  The ad appears 15 seconds into the video, an approach that takes into account the way users often sample a few seconds of video before deciding whether to watch the whole thing.  The typical ad will last about 10 seconds; if a user clicks on the ad, it will pause the YouTube video, show the ad in its entirety, then continue with the remainder of the YouTube video.

Google’s approach is smart.  They avoided the use of pre-roll ads, which users find almost universally annoying and instead adopted an approach that was first introduced by video ad network VideoEgg last year.  Initially, ads will be limited to content from Google content partners and will not appear on user-generated or user-uploaded video.  Ads will be sold on a PPM basis (initially $20 per thousand displays, according to the New York Times), although the model could easily be adapted to a PPC approach in the future.  It will be interesting to see how advertisers make their overlays compelling to drive click-throughs in that format.

Video is emerging as a key content delivery platform.  For now, it’s use is largely in the b2c space, but b2b video has begun to trickle out as well.  As an advertising model develops, video will take hold in the consumer and select business markets.