DailyTech - YouTube Tests Pre-roll Video Ads

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Internet YouTube Tests Pre-roll Video Ads
Shane McGlaun (Blog) - May 22, 2009 10:33 AM

43 comment(s) - last by ggordonliddy.. on May 27 at 6:21 PM

Ads will run 15 to 30 seconds long before a video begins to play

YouTube is by far the most visited online video site in the world with Hulu coming in second in America, according to recent studies. The problem for YouTube is that the vast majority of the videos on its site are made by individual users and the unpredictable quality and content makes it difficult for advertisers to advertise on the videos.

To help increase the available video space for advertising, YouTube is trying to woo TV and film studios to put their professionally made content on the website and thereby give advertisers a predictable place to run ads on the video site.

Neowin reports that YouTube is set to start a trial deployment of pre-roll video ads on select videos from providers like BBC Worldwide, ITN, Discovery, National Geographic, and Channel 4. The ads are reportedly sold at a flat rate per 1,000 views.

YouTube is said to recommend a length of 15 seconds max for the video ads, but offers the advertisers up to 30 seconds to run ads before the requested video begins to play. Among the advertisers taking part in the trial run of the pre-roll ads are Activision, Renault, Match.com, Nissan, and Warner Brothers.

The first of the ads set to debut will be for the new Warner Brothers film "The Hangover." Neowin quotes the head of YouTube UK saying, "Since we launched YouTube we have been trying to balance the demands of users looking for free, entertaining, professional content on the web, premium content owners looking for ways to monetize their content and advertisers looking for more premium content for them to showcase their TV creative against."

If the new ads work, the increased revenue opportunity may help YouTube seal more content deals for professionally made films and TV. YouTube was working on a content deal with Sony in April 2009.

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Makes sense

By Spivonious on 5/22/2009 10:51:26 AM , Rating: 5

This makes sense to me, as long as the ads only run before copyrighted content. Forcing me to watch a 15 second ad before watching someone's dog making a funny bark would be a very bad business decision.

RE: Makes sense

By imaheadcase on 5/22/09, Rating: -1

RE: Makes sense

By AlexWade on 5/22/2009 11:20:58 AM , Rating: 5

It is not always about clicking on an ad. It has a lot to do with brand recognition as well. When people make purchasing decisions, they are going to go with a company they recognize. Companies know this, so the payoff is not necessarily clicking on an ad.

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RE: Makes sense

By mindless1 on 5/25/2009 5:43:22 PM , Rating: 2

Except that since so many people dislike ads, when they see the brand they associate it with unpleasantness, a strike against the company.

That you're reminded their product costs more because they paid for the ad you're seeing, is strike two.

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RE: Makes sense

By Trisagion on 5/22/2009 11:21:49 AM , Rating: 5

You are completely wrong. Click ads may be next to useless, but advertising on the Internet generates tons of revenue. Most of Google's profit comes from it's AdSense advertising and other programs. That's why standard print is dying out. Companies are investing more in online advertising than in print media.

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RE: Makes sense

By Chaser on 5/22/2009 11:38:06 AM , Rating: 3

this is not about click ads. Its about inserting advertiser sponsored video ahead of the copyrighted video that you may view on You Tube just as many commercial websites have been doing for some time, in particular News sites.

I guess it was just a matter of time that You Tube would follow suit. But it still sucks just the same.

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RE: Makes sense

By Laereom on 5/22/2009 2:09:05 PM , Rating: 1

Youtube loses Google a few million dollars a day. I remember calculating they'd have 50% higher net profits if they'd just cut youtube. It was about time they either did something like this or started charging for the service; they're hurting copyright holders of music, misallocating resources, and monopolizing the online video market at the expense of their search revenues -- which could be being spent on other, more profitable investments.

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RE: Makes sense

By JediSmurf on 5/25/2009 3:28:36 AM , Rating: 2

What exactly does the existence of youtube have to do with "misallocating" (is that a word?) resources? You'd really rather they just close it down?

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RE: Makes sense

By mindless1 on 5/25/2009 5:49:44 PM , Rating: 2

Look at the other side of the coin, to catch many fish you cast many lines into the water. Not all catch fish right away but the more lines you leave in, the more fish you tend to catch.

Many online ventures were losses initially, but few are as popular as YouTube. The sight definitely has a huge potential to turn around and make a profit, and I dare say few other sites on the internet have as much profit potential that has yet gone unexploited.

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RE: Makes sense

By Samus on 5/22/2009 4:42:57 PM , Rating: 2

I personally hate advertisements, but they are neccessary, and sometimes amusing. It's just that most advertisements are crap.

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RE: Makes sense

By bongsi21 on 5/24/2009 11:27:24 AM , Rating: 2

Yes your correct ads are helpful but i suggest in google/youtube should change the concept of ads. 30 secs of waiting now a days are too long in waiting for a particular video. They should trim it or focus in animation that will stimulate the creativity and interest of the viewers.

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RE: Makes sense

By phxfreddy on 5/24/2009 7:27:27 PM , Rating: 1

Yah really helpful. So helpful I use FireFoxes adblock feature as much as possible.

...otherwise I might die of all the help foisted upon me.

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RE: Makes sense

By mindless1 on 5/25/2009 5:45:52 PM , Rating: 2

Generating revenue for the ad agency isn't quite the same thing, we're talking about the effect on the consumer and the company offering the product or service that's being marketed to that consumer.

The effects of online advertising on this aren't quite so clear, we'd have to think that an ad has to be appealing, entertaining, long gone are the days when someone is ignorant enough they need to be told that Tide is for washing clothes for example.

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RE: Makes sense

By TSS on 5/22/2009 11:27:11 AM , Rating: 3

my dad has a website for free classical sheet music. amongst works of his own are works in public domain, and some very old stuff he managed to pick up at garage sales.

if *anything* is a niche these days it's classical music, and this is just sheets of notes. yet the ad revenue is more then enough to support a household.

they work. the proof is simple: there's only been more and more of them. since ad campains are expensive, do you really think company's would keep them up if they *didn't* see any revenue increase?

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RE: Makes sense

By Lord 666 on 5/22/2009 12:32:50 PM , Rating: 2

What size household? and in what state?

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RE: Makes sense

By TSS on 5/23/2009 8:01:41 AM , Rating: 2

enough for a 3 person household. in the netherlands, so we get paid in dollars which get converted to euro's which is at this point, not much. not getting into specifics online tho.

the point is the target audience. it's about as small as you can pick a market. yet ad revenue is there and it's (relatively) huge. imagine what happens if a company promotes a product that everybody wants. probably explains the downfall of the quality of music the last few decades right there.

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RE: Makes sense

By mindless1 on 5/25/2009 5:58:29 PM , Rating: 2

I suspect you have it backwards, when it's a product everyone wants there is already a lot of competition while you were talking about a niche product with limited competition.

For example, suppose the product was automobiles, how many potential customers would be likely to seek a car from a manufacturer they never heard of besides seeing an ad, opposed to one of the major manufacturers in the region?

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RE: Makes sense

By ggordonliddy on 5/22/09, Rating: -1

RE: Makes sense

By croc on 5/23/2009 2:28:56 AM , Rating: 4

Usage should be 'What the hell is "company's"?'

Did you really drop out of school in the first grade, or were you just socially promoted in order to graduate, like so many others?

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RE: Makes sense

By Alexstarfire on 5/25/2009 4:09:30 AM , Rating: 1

LOL, nice. Of course the OP is from the Netherlands so I don't expect him to have perfect English. The last poster shouldn't have been such a dick about it. He got rated down so it's all good.

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RE: Makes sense

By mindless1 on 5/25/2009 6:02:55 PM , Rating: 2

Ya know, in a just world all spelling Nazi would wear a sign on their back, so then when we see them in public we can criticize them on any minor imperfections they may have like they do on the internet, like their hair parted the wrong way or walking funny, etc.

I'm not saying we should, just that it would be fair. They wouldn't like it of course, but they don't care if others dislike the way they act, they feel exempt from normal social behavior. I'd rather spend time with someone who misspells a word or two than someone who is antisocial.

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RE: Makes sense

By ggordonliddy on 5/27/2009 6:17:09 PM , Rating: 2

> Usage should be 'What the hell is "company's"?'
>
> Did you really drop out of school in the first grade, or
> were you just socially promoted in order to graduate,
> like so many others?

You appear to be incredibly stupid.

Obviously he was using "company's" to get across his intended meaning of "companies". Since I am not a complete dumb@$$ and I realized he was trying to use a plural word, I correctly used the word "are" instead of "is".

Please go back to school after violently flogging yourself and tearing off your sack.

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RE: Makes sense

By ggordonliddy on 5/27/2009 6:17:10 PM , Rating: 2

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RE: Makes sense

By ggordonliddy on 5/27/2009 6:21:21 PM , Rating: 2

DT has a bug with double-posting, when Post Comment is only clicked once.

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RE: Makes sense

By mindless1 on 5/25/2009 5:55:40 PM , Rating: 2

The problem with your argument is it only focuses on a single case of a company starting to advertise. The bigger picture is that then we have competitive ads from other companies, the marketing departments put their often misleading "spin" on the facts, lots of advertising money gets spent just to remain in the same competitive position instead of having an advantage, and product prices go up.

Small companies have lesser budget (all else being equal) than larger competitors in the same field, so they can develop larger ad campaigns which generally result in them remaining in the same relative market position.

Result - Ads don't do as much good as some may think, except for relatively unknown, especially new product introduction.

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RE: Makes sense

By MScrip on 5/25/2009 9:47:04 PM , Rating: 1

quote:
how many ads have you clicked on recently?

You can't click on a billboard either... but there are plenty of billboards littering the highways...

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RE: Makes sense

By AntiM on 5/22/2009 11:24:22 AM , Rating: 2

I think they would do better with a 5 second ad; anything more than that I would consider annoying. They should also put ads at the end of the video in some cases rather than at the beginning.
I get a lot of entertainment and education from YouTube, so whatever helps keep it afloat.

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RE: Makes sense

By StevoLincolnite on 5/22/2009 11:58:52 AM , Rating: 5

I can imagine having to wait 15-30 seconds while an ad plays only to get rick rolled...

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RE: Makes sense

By Alareth on 5/24/2009 2:13:25 PM , Rating: 2

Witness one and all, the birth of the Ad Roll ;)

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RE: Makes sense

By Murloc on 5/22/2009 12:15:40 PM , Rating: 3

I think I would not watch a video if I had to wait 15 seconds of ad.

they should put splash ads in the bottom part during video execution or something like that.

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RE: Makes sense

By stromgald30 on 5/22/2009 3:42:40 PM , Rating: 3

I agree. They seem to be taking a page out of hulu's playbook, which is fine if I'm watching a 20-40 minute video. A 15 second ad would be terrible for a 15 second clip.

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RE: Makes sense

By testmetest on 5/22/2009 5:05:57 PM , Rating: 2

I hope they don't put ads in the *middle* of the videos!

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RE: Makes sense

By FaceMaster on 5/25/2009 11:26:56 AM , Rating: 2

They need to be very careful with this sort of advertising. If you're just browsing the occasional video then it won't be too much of a problem, but if you're on it for hours at a teim (Face it, we've all been there) then the same adverts over and over again could get real old, real fast. I love the simplicity of youtube. Adding adverts everywhere will slowly degenerate it. It would be a great shame to have such a great provider of videos watered down to such an extent.

I am grateful to Google for providing this service for free. Perhaps they could start charging a reasonable fee for a version with out these adverts. Throw in a larger maximum video length and a 'back up your video archive' button and I would consider it. There's no way I can post my longest fart video unless they do this, and we all know that youtube is lacking decent quality videos like that. It would be great to retrieve youtube videos in the event of... say... a nuclear holocaust.

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One more down the drain

By BZDTemp on 5/22/2009 11:26:30 AM , Rating: 1

So long my old friend.
Hope we get to laugh again.

Seriously if youtube becomes infested with adds they shoot them self in the foot. I'll get my kicks from elsewhere and so will a lot of other people. Youtube with ads will be just as bad as TV with ads and my time is worth more than that.

RE: One more down the drain

By Helbore on 5/22/2009 11:34:51 AM , Rating: 2

I've got to agree with you. Most of the fun of Youtube is casually browsing from one video to the next. If they throw in 15-30 second ads before each one, it would become a nightmare and would put people off.

Now I know they are CURRENTLY only talking about putting ads before copyrighted content, but if this proves to generate money, how long do you think it will be before these ads end up EVERYWHERE?

Face it, all they have to do is offer a small percentage of the money to the user who puts the video up and everyone will happily allow ads before their vids.

Then Youtube gets killed by a new startup video sharing website - which will then be bought out by google - which will then be ruined by profit-crazy businessmen and the cycle begins again.

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RE: One more down the drain

By Alexstarfire on 5/25/2009 4:59:04 AM , Rating: 2

Of course those who actually don't like wasting time don't watch YouTube anyway. I may not do a lot with my time, but I don't need to waste it watching a guy do a faceplant or some girl/guy yelling to leave Britney alone. I think that person needs to tell that to Britney anyway since she's done all of it to herself, but w/e. Granted some times YouTube is actually useful, seen quite a few help videos on there.

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Limited ads are fine

By Donovan on 5/22/2009 11:58:31 AM , Rating: 4

I don't have a problem with putting a short ad at the beginning of a TV episode. Where sites usually go overboard is sticking a 15 second ad on every 20 second video clip...not everyone is committed to watching your video and obtrusive ads will drive away casual browsers. The worst I've seen was a Comedy Central site where every time you seek in the video you have to watch the same commercial again. Harassing potential customers to the point of frustration is probably not the best way to sell your product.

Why not allow a reasonable amount of viewing as a teaser before the commercial so that people can make sure it's even the video they were looking for? Why not make the commercials more entertaining instead of the usual bland marketroid drivel? They seem to think because you are a captive audience that the commercial can be dull and pointless, but the opposite is true: ads we are forced to watch will get the most scrutiny and should be designed accordingly.

Meh

By hemmy on 5/22/2009 7:14:49 PM , Rating: 2

I have hated Youtube since they have gone on a video muting rampage, destroying half the content on their site.

RE: Meh

By bigboxes on 5/23/2009 11:28:34 PM , Rating: 2

I agree. If they go to 15-30 second ads I'll never visit the site. Don't tell me that it's worth it. It's not. I use whatever technology I have at my disposal to block any and all ads. It's me against the world baby! Yeah, I understand that there needs to be some ad revenue. Just not on my watch. :)

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The future

By Danger D on 5/22/2009 3:52:31 PM , Rating: 2

You need a business model that includes revenue. If a site can’t make it on ads alone, they just build up a fan base until they’re comfortable transitioning to a paid site. That's been happening more and more, with newspapers, my favorite running Web site, Craig’s list, etc.

transparent adds

By tharik on 5/22/2009 6:24:10 PM , Rating: 2

I believe transparent adds would be effective for this media. Non obtrusive and can be used for most content. An example would be a transparent add bar at the bottom of the screen by default, but can be changed to the top or either side.

I also agree with other comments that if the adds are to long or to annoying that it would likely deter me from purchasing the advertised product.

Some well known companies would not even have to create an add, they could just use a transparent logo.

Better solution

By Cullinaire on 5/24/2009 4:06:47 AM , Rating: 2

It's google, they should be able to figure out some way to encode subliminal content into the videos. That way, you watch the video and the ad simultaneously.

Maybe they do this already...

I Hate Ads But This Will Benefit Me

By mindless1 on 5/25/2009 6:07:07 PM , Rating: 2

Putting ads in clips will decrease my enjoyment of YouTube, resulting in me no longer wasting away hours on the 'site. I don't mean I hang out there but over time you look back and YouTube was like a black hole sucking you in for longer than you planned on surfing there.