YouTube Cranks Up Ads

If you browse YouTube today, you might well see something you’ve never seen before – ads. Google, which bought the site last November for $1.65 billion, is introducing ads. But it’s not on everything, and, claims Google, they’re quite unobtrusive.

Since its purchase, Google has been wondering how to make money from YouTube, and has spent several months trying out different advertising models. Now they’ve settled on one that seems to work.

It takes the form of overlay ads that fill the bottom 20% of the screen and  appear 15 seconds after a user begins watching a video clip. The user can ignore the ad, which will vanish after around 10 seconds. However, if the users clicks on the ad, the video stops and a video ad begins. When it’s done, or if the users closes the ad, the original video resumes.

 

The ads won’t be ubiquitous; they’ll only appear on videos from Google content partners to avoid copyright conflicts and stop ads appearing on clips whose message might not be to the liking of advertisers.

 

Ad revenue will be split between the media partner and YouTube, and Google will charge advertisers $20 for every 1,000 times the ads are displayed. Advertisers will be able to target specific channels and genres, as well as demographic profiles, geography and hour of the day.

 

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

 

According to the ratings, YouTube draws an audience bigger than the combined audiences of its three nearest competitors. The video ad market is projected to grow to $4.3 billion by 2011.

 

Yahoo has also been testing overlay ads.