YouTube Introduces Video Advertising

NEW YORK, August 22: YouTube today introduced video advertising on the site, opting for “overlays” as opposed to pre-rolls where ads are featured at the beginning of a clip.

The overlay ad appears at the bottom of a clip 15 seconds after the video begins and disappears within 10 seconds if the user doesn’t click on it. The user can also opt to close the ad. If the user clicks on the campaign, the video clip they were watching automatically pauses and the full ad appears.

“What we have come up with is a user-controlled ad format that is engaging,” said Eileen Naughton, Google’s director for media platforms, in the New York Times. “We want our users to be able to accept and choose what type of advertising they engage in.”

Shiva Rajaraman, the product manager for YouTube, told the AP that based on internal research, 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.

Initial video advertisers on YouTube include 20th Century Fox and New Line Cinema; about 50 companies have signed up for the new service, Reuters indicates. The clips that advertising will be featured in have all been legally licensed to the Google-owned site; no ads will appear in user-generated content. Revenues from video advertising on YouTube will be shared with the content owners. Advertisers will be charged $20 for every 1,000 times the ad is displayed.