Wednesday, August 22, 2007

Google turns to overlay advertising to gain ROI on YouTube

I realize nothing in life is really ever free so it was just a matter of time before Google wanted ROI on it's $1.35 billion investment in YouTube. At least these new ad overlays are much less exasperating than "preroll" ads. Preroll ads have gotten totally out of control at movie theaters. This past weekend when I went to "The Last Legion" I had to sit through almost a half hour of ads before finally seeing the feature film (In fact I use the term "feature film" loosely - the film itself was so short it seemed like a made-for-TV movie). At least on a DVD you can fast forward through them. The worst part is I suspect that film editors are apparently slashing content to the point of making the plot seem choppy and disjointed just to accommodate this crass consumerism.

Ever since Google bought YouTube last November, it has avoided cluttering the site and the video clips themselves with ads, for fear of alienating its audience.

A demonstration of an ad for a movie on the bottom of a YouTube video. Real ads would not reflect the content of a video.


Sample Ad Spot Video (

The strategy helped cement YouTube’s position as the largest video Web site but didn’t do much to justify YouTube’s $1.65 billion price tag.

Now Google believes it finally has found the formula to cash in on YouTube’s potential as a magnet for online video advertising and keep its audience loyal at the same time.

The company said late Tuesday that after months of testing various video advertising models, it was ready to introduce a new type of video ad, which it said was unobtrusive and kept users in control of what they saw.

The ads, which appear 15 seconds after a user begins watching a video clip, take the form of an overlay on the bottom fifth of the screen, not unlike the tickers that display headlines during television news programs.

A user can ignore the overlay, which will disappear after about 10 seconds, or close it. But if the user clicks on it, the video they were watching will stop and a video ad will begin playing. Once the ad is over, or if a user clicks on a box to close it, the original video will resume playing from the point where it was stopped.

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