The Tale of the YouTube Chicken and the VideoEgg
YouTube’s announcement that it is finally going to start running video ads along with some “media partner” videos is causing all kinds of reactions across the blogospheric Milky Way.
In my view, the biggest takeaway is that we’re finally seeing how Google – which purchased YouTube for about $1.6 billion – thinks it can make money from online video, which will surely be massively influential on how the rest of the industry attempts to do the same for some time to come. The basics are: run an overlay ad that pops up on part of the video a short time after the video starts playing, and allow users to either click an “x” to “opt out” of the ad or click a play button to pause the original video and play the video ad. The key in the case of YouTube is to only run the ads on “approved” videos, which avoids the sticky issue of placing advertising on top of content that may not be copyright protected or may include content of questionable standards.
Personally, I’m surprised to see a major shift away from a 15-second or so pre-roll and post-roll method of video advertising, which seemed poised to become something of a standard. Doing it this way does a few things: guarantees that eyeballs will view the ad, which satisfies advertisers who are paying to get their wares seen. The big question is which form of advertising is less obtrusive: pre-roll or overlay during the video? Again, personally, I’m happy to get the short pre-roll ad out of the way straight off so that I can then simply enjoy the video without worrying about taking action to opt-out of advertising. But this form of advertising is so new that Google/YouTube likely has the power to create an industry standard.
Meanwhile, the conversation in the blogosphere is focused on who invented the video ad overlay concept first. VideoEgg seemed poised to claim the title, though this morning Mike Arrington at TechCrunch seems overwhelmed in explaining that “everyone” invented video ads “first” (YouTube, VideoEgg, Brightcove, and Adbrite all argue that they either were “thinking about it” or doing it first!).
Jim Kukral closes off the debate nicely by writing: “The fact is, it doesn’t matter who did it first. YouTube is the biggest shark in the pond, and they did it before everyone else.” I’ll just extrapolate that to mean “they did it in a big way before everyone else.”
Around my office, we like to say that when you come up with a good idea, don’t worry, you’re not alone. Someone else has already come up with it, or is thinking about it at the same time!
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August 23rd, 2007 at 2:22 pm
For what it’s worth, I really don’t like prerolls. Unless it’s something I really, really, really want to see, I don’t tolerate them and usually give up on watching the video.
The biggest reason is that with most prerolls I have little idea how long they actually are once they start. If I do tolerate a preroll I’m usually watching the progress indicator to see how long it’s taking… and therefore I’m certainly not watching the ad!
August 23rd, 2007 at 6:55 pm
Hmm… I wonder if you would be okay with pre-roll if you knew — based upon the establishment of an “industry standard” — that it would only be 10-15 seconds in length?
August 24th, 2007 at 12:49 am
I haven’t seen the overlay ads yet. I’m not a huge fan of the pre-roll, but recognize ads in general are a necessary evil. How can we expect to get quality video content for free, forever?
If the ads are engaging right away, I’m happy to watch them, though.
Great post title, by the way.
August 24th, 2007 at 9:56 am
Thanks Eric F! I think YouTube will be a fascinating test case to see what the majority of people will be able to put up with. There have been a nice amount of whining about the overlay ads thus far, but the proof will be in seeing if YouTube can maintain and grow its huge audience while making money for Poppa Google at the same time.