August 22nd, 2007

YouTube’s New InVideo Ad Format Is Not Google AdWords

by

The new YouTube InVideo ad format is big news not because the format is new — Google has been testing the format for a while, and other sites like VideoEgg have used it. It’s big news because the ad format is being rolled out on YouTube’s massively scaled video site — kind of reminiscent of Google rolling out AdWords on its massively scaled search site.

Except it’s not.

The InVideo ad format appears as a teaser overlay at the bottom of the video 15 seconds in. You can click the teaser to view the video ad in a smaller pop-up viewer, then go right back to your video.

youtube-invideo-advertising.jpg

youtube-hairspray-ad.jpg

You can see the ad for yourself here (hopefully it’s still there when you try it).

The InVideo ad format is undoubtedly less annoying than pre-roll videos — and that’s a considerable achievement. But it’s nowhere near the kind of breakthrough that search advertising was.

Not being interruptive is the very LEAST that online advertising needs to do in order to thrive — what it really needs to do is be RELEVANT.

The beauty of search advertising is that the format and the relevancy of the ad are PERFECTLY aligned with that of the “editorial” content, through the miracle of search keywords.

That will surely be the case in some instances of InVideo ads, but in many if not most instances, the ads will have nothing to do with the editorial content — and the relevancy to any individual viewer, unlike keyword targeted search ads, will be hit or miss.

And there’s a BIG problem with low relevancy — advertisers only pay if someone views the ads.

Video advertising, with nearly $70 billion still trapped in traditional TV ads, is about to cross the Rubicon into the land of pay-for-performance. In the traditional TV ad model, it was opt out, i.e. you had to change channels, get up to get a snack or go to the bathroom in order to avoid the ad.

Now, it’s opt IN. And now we’re going to find out what people REALLY think of video ads, which Madison Avenue has always known in its heart but has never been able to admit.

The ads may be unobstrusive, and YouTube has mountains of videos to insert the teasers into — but if nobody clicks…

We can expect a new cottage industry to emerge — the art of designing YouTube InVideo teasers. The glass half full approach will be optimizing the teasers to draw user interest and get them to view the video ad.

The glass half empty approach will be optimizing the teasers to act as FREE advertising, which is what they will be if no one clicks.

The assumption is that the $70 billion being spent on traditional TV ads will soon come flooding into online video. The problem with that assumption is that advertisers are about get, for the first time, real data on whether video ads “work.” If the data shows that nobody is clicking, will advertisers continue to dump money into the format?

I think it’s true that a video ad has the power to connect with people at a visual and emotional level that’s simply not possible with a text ad. But the beta is MUCH higher — it’s also possible to annoy people with video ads in a way that’s simply not possible with an innocent text ad.

The BIG question, of course, is whether YouTube InVideo ads will scale like Google AdWords. Henry Blodget has best and worst case scenarios.

If InVideo advertising does scale it may be more a reflection of advertiser inertia than AdWords-like value creation for consumers.

I observed the other day that it’s easier for advertisers to create value for online consumers with information than with entertainment.

We’re about to find out whether that’s true.

Comments (9 Responses so far)

  1. [...] sitting on an “absolute gold mine” of videos that people spending hours watching. Scott Karp makes a great point that the video ads not only need to be unobtrusive but relevant, while Andy [...]

  2. There is the possibility that these InVideo ads can be sold as advertising based on exposures, with fees even if viewers do not click on them. Don’t know if we can automatically assume that advertisers will hold the Internet to a standard to which they never held TV ads or billboards. Or maybe there would be a premium charge for user clicks. (Steve Boriss, The Future of News)

  3. Hey Scott,

    No question that direct marketing will clash with madison avenue types who will want splashiness over conversion and click throughs.

    It sounds like Google is trying to do what it can to improve relevancy in this manner, and it is touched upon in the NYtimes article, with statements like “Viewers click on them [invideo ads]at a rate roughly five times higher than banner ads”, and “advertisers would be able to take aim at specific channels and genres, as well as demographic profiles, geography and hour of the day”.

    Being able to actually target content in ads is technically very tricky; I suspect that Google is doing what it can to improve the relevancy and matching beyond mere tags and descriptions, but this is a technology that I think many companies are racing towards.

    Cheers
    t @ dji

  4. Scott –

    Video advertising is where it’s at right now. Your post is timely with what I just posted as well:

    http://www.pubexec.com/pubtalk/pubtalk.bsp?var=story&sid=73093

    Great post!

    Tony’s post about “Madison Avenue types who will want splashiness over conversion and click throughs”… he must not talk to some of the agency people who I do because the want both!

    Also, can you direct your links to a new window so we don’t have to keep hitting the dreaded “Back” button. Argh!

  5. http://www.adotube.com/

    looks like this company has been offering a Youtube/Flash video ad overlay system. Google is just copying their concept, and will probably put them out of business (block them from now doing this to their own youtube content). But I guess their is a market for placing these teaser ads in all sorts of Flash videos, wherever. A video ad network. What do you think?

    I am not affilated with this company in any way, just saw them on a Google ad!

  6. It seems that everyone is missing the fact that anyone can create an adword text ad. Creating a flash overlay is much more complicated and has a cost to create. That is going to have a huge effect on the ability of advertisers to scale their spend.

  7. This is a foot in the door. YouTube needed to stem the “it’s all free” tide YESTERDAY. This is a start. It will become more targeted as the technology to create these overlays in near real time as they are served will be demanded by advertisers and eventually delivered. Viewer acceptance of the idea has to be cultivated NOW. Still, accurately targeting viewers with behavioral tracking via cookies and web bugs is thwarted by an estimated one third of browser users who regularly (once a month) delete cookies. To what degree ad relevancy on the web (outside of the search engine model) can better broadcast TV’s relevancy is still up in the air IMHO, though many BT providers are pretty cocky when they talk up their game.

    Madison Avenue has a comeback for click-through failures. They call it “brand awareness” though it’s hard to understand the muffled utterance with their head in the sand.

    I predict that the next category YouTube will attempt to monetize is corporate users for whom YouTube is merely a free server for their professionally produced promotional materials. I think YouTube will increasingly try to draw a line between the vanity exercises of amateur UGC and those who add to their profits by way of free exposure and free video servers.

  8. Google and others are claiming that these overlay ads are not intrusive. Of course they are intrusive. If you are watching a video and you see an ad it is intrusive – as good advertising should be. Let’s cut the charade and admit that it is intrusive. Nobody would watch an ad if it wasn’t.

    Check out the Ad-Supported Music Central blog:
    http://ad-supported-music.blogspot.com/

  9. Well done on the great post. It’s so refreshing to hear a practical approach to this hype. The title nails the hype exactly, it’s just another form of invideo and does nothing towards making the ads itself better, such as creating relevancy. Even the commenter’s on this post seem just a bit smarter than those I have read on other sites. Embed is right, how the heck are people going to create the ads unless they have a budget for these sorts of flash teaser ad units. Slim pickings like the numbers say. The real ironic thing is that I already nailed the perfect model. Who’s listening to ME? I can blow your mind with what I know and done. Youtube “overlay”? LOL… Invideo my dear… Let me show you what overlay really means… but if I do, you’ll agree, soon, everyone is going to get blip’d!

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