YouTube Videos to Have 'Overlay' Ads
By ANICK JESDANUN
NEW YORK (AP) - Video advertising is coming to YouTube, but it won't be the
type common at sites elsewhere. Starting Wednesday, the popular
video-sharing site plans to feature semitransparent "overlay" ads at the
bottom of selected video clips.
The ad disappears after about 10 seconds if the viewer does nothing; the
featured clip automatically pauses if the viewer clicks on the overlay to
launch the full pitch.
YouTube said it was trying to avoid pre-rolls that precede the main feature
at sites like Microsoft Corp.'s MSN, which partners with The Associated
Press on a video news service.
Shiva Rajaraman, product manager for YouTube, said internal tests show more
than 70 percent of people give up when they see a pre-roll. By contrast,
less than 10 percent decide to close an overlay, which they can exit by
clicking on an "X" in a corner.
The overlay format also gives advertisers more flexibility, he said, because
they aren't constrained to keeping a video ad at 15 or 30 seconds to avoid
defection. Because a viewer chooses to watch, a video ad can run much longer
- clicking on one pre-launch overlay launched a 2-minute trailer for "The
Simpsons Movie."
YouTube, which Google Inc. bought last year for $1.76 billion, is still
trying to justify its hefty sales price. Despite its huge audience, YouTube
generated about $15 million in revenue last year, based on figures provided
in Google's annual report.
The site already has been showing display ads, but video ads look to be far
more lucrative, particularly as they attract brand-name advertisers already
used to buying video spots on television.
Initial video advertisers on YouTube include Warner Music Group Corp., News
Corp.'s 20th Century Fox and Time Warner Inc.'s New Line Cinema. They will
accompany video clips from selected partners, including Warner Music, the
band Killswitch Engage and dozens of heavy video contributors accepted into
a user-partner program.
Marketers can target their ads by user demographics, location, time of day
or genre, such as music videos or sports. They won't be able to buy ads by
keywords, though, the way Google allows merchants to purchase text ads
triggered by a user's search terms.
And unlike Google's pay-per-click search ads, advertisers will be charged by
eyeball - $20 per thousand viewers - regardless of whether the user clicks
on the overlay.
Revenues will be split with the video owner, although officials won't say
how. The video owner can decline all ads or selected ones, such as those
from competitors.
Despite differences with Google's keyword ads, which generate the bulk of
the company's revenues, officials said the two share a common goal of being
nonintrusive.
"Ads need to provide value to the user community," said Eileen Naughton,
Google's director of media platforms. "We've proved over and over again on
Google that ads are really useful information when users raise their hands
and engage with them."
source: apnews.myway.com//article/20070822/D8R626LG0.html