YouTube begins offering overlay ad format in videos from select content partners.
In a big first, YouTube has decided to let advertisers inject their messages inside the video frame for select content on its site. The new offering, dubbed InVideo Ads, mimics the clickable ad overlays introduced in recent months on ad networks like VideoEgg and YuMe.
In testing for several weeks, the ad product consists of animated bars that obscure the bottom 20 percent of the video frame for a given clip. They initiate 15 seconds after the beginning of a clip, an interval YouTube selected because "it takes users 10 seconds to become acclimated to what they are watching," according to Shiva Rajaraman, YouTube Product Manager. InVideo overlays are "80 percent transparent" and remain visible for approximately 10 seconds before shrinking to a small button users can later click to view the marketing message again.
YouTube has set a $20 CPM for InVideo ad buys consisting of an InVideo ad accompanied by a tiny in-player companion ad and an adjacent in-page unit. Brands advertised in the testing phase include Universal Studios' "Evan Almighty," Twentieth Century Fox's "The Simpsons Movie," BMW's 3 Series convertible, NewLine's "Hairspray" and approximately 15 others. Select content providers taking part in InVideo -- and in any ad revenue it generates -- at launch include Ford Models, Warner Music Group and Roadrunner Records. Several of the content examples YouTube shared during a press briefing consist of ads placed within music videos.
Rajaraman said the field of participating content owners is "significant," but declined to identify their exact number or to estimate the volume of ad impressions YouTube expects to offer media buyers under the new program. But he insisted reach is not a concern.
"Our main goal is to support a range of genres and advertisers, and frankly to support any size campaign," he said. "Given the inventory there, we're comfortable with supporting large as well as highly targeted campaigns."
Clicking on an overlay ad pauses the current video and launches one of two experiences brands can choose between. One is a new clip superimposed over the video in progress via a player-within-a-player interface. When the paid clip ends or is closed, the original automatically picks up where it left off. Rajaraman said 76 percent of those who click the overlay and watch the video ad viewed the entire trailer for NewLine's "Hairspray."
The other option is a Flash-based interactive experience in which the user is invited to navigate an interactive menu. Warner Bros. created such a unit where users can flip through selected album covers (click for example).
During YouTube's research process, Rajaraman said, "One of the key things we found, not surprisingly, is that when a video is playing on YouTube their attention is [locked in to the video frame]. When we came up with an ad format, we realized that... it needs to be in the player."
Yet when the Google-owned video portal tested pre-roll placements, YouTube users abandoned video clips at a more than 50 percent rate. The overlay, by contrast, results in an abandonment rate under 10 percent. Not only that, but click rates are five to 10 times greater than standard display click-to-video ads, according to Rajaraman.
He added YouTube also gathered data during the test period by monitoring comments, speaking directly with some users, and observing navigation patterns.
YouTube says it serves 3 billion minutes of video each month, creating "a lot of opportunities for advertisers." The vast majority of that content will not support its new InVideo ads, however, owing to the adjacency concerns so often raised by agencies on behalf of their most blight-sensitive brands. Those same concerns are no doubt also behind the YouTube decision not to insert ads in partner content that users choose to embed on other sites, such as blogs and MySpace pages.
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