Youtube to Offer Optional Advertising

Posted by Richard Kastelein in Breaking News on November 23, 2010  |  0 Comments More from this author  |    |  Follow Richard Kastelein on: Facebook | LinkedIn | Twitter | YouTube

YouTube, with its 35 hours of content uploaded to the social site every minute, has announced that it has designed a new ad unit which will give viewers the option of of which ads they want to watch, or more importantly, not watch. This move will certainly add more fuel to the fire in terms of the major broadcasters and content creators that have blocked Google TV including CBS, NBC, ABC, Viacom et al.

Google has coined the new system TrueView, and now users will have the option to watch three different ads or simple to skip the ads altogether in which case the advertiser is not charged.

YouTube is giving consumers the ultimate control over the commercial aspect of their viewing, which is similar to Hulu's choose-your-own ad feature, except Hulu does not allow for complete skipping of ads.

"Some advertisers had initial gut reaction of, 'Wait, you're gonna let users skip my ad?'" Phil Farhi, a Google senior product manager, told Advertising Age. "But the thing that tips them over from that gut reaction is you're not paying for those skipped ads, and it's a system that allows you to reach that opted-in engaged audience at scale."

Mediatel reports:

These formats are expected to be rolled out in the next few weeks, according to Ad Age. It might sound like all bad news but there are some (small) positives - firstly, viewers want more and more choice and will come to expect to be 'in control' as connected TV becomes the norm (although there is an argument that perhaps the consumer is being asked to make an effort to decide, when ignoring or viewing are both relatively effortless). Also, advertisers will not pay for ads that are not viewed. For brands, the challenge will be getting viewers to want to watch their ads, which will encourage more creativity.

But, as with most Google plans, there is only one real winner - YouTube. The video giant is going down the sales house route, which will allow it to implement a micro-payment system. This will put YouTube in a unique position and will, of course, allow the Google-owned site to bypass broadcasters such as ITV, which is potentially very bad news for the industry.

Also, TrueView implies that only ads you choose to watch have value (in the same way that the primary online advertising model only gives value to ads that are clicked on). As many researchers will tell you, the brain is more complex than that, and some of the most effective ad campaigns in history have worked at a low-attention level.

Initially, advertisers with a managed account at Google will have access, but eventually it will open up to all.

In the original article in Adage.com Phil Farhi, a Google senior product manager noted:

Eventually, Mr. Farhi said, YouTube's promoted videos can potentially become a TrueView ad if they're short enough in length. There are tens of thousands of promoted videos, which are paid for by marketers, that come up on the side bar of YouTube next to a viewers' watched video. And because YouTube is the second biggest search engine online, promoted videos are also part of the search ads that come up on YouTube.

Mr. Farhi said that advertisers can use YouTube as a focus group, testing out an ad to see how it does before they make it into a TV campaign. With TrueView, they'll be able to immediately see how well the ad is doing with the public and if they need to tweak it.

"You can imagine getting to the point where someone comes to us and says here's a video, here's how much I'm willing to pay for an opted-in engaged view and we go and find the audience," Mr. Farhi said.