Move is a step toward performance-based pricing for pre-roll.
In a test it hopes will improve user experience and lead to better ad creative, YouTube added a "skip" button to some pre-roll ads. The ultimate goal, says YouTube, is to create a scenario where advertisers pay only for ads users watch in full or engage with some other way.
It's a minor development to be sure. Skip buttons for video and interstitial ads have been around as long as the ad messages they help users circumvent. But the move suggests Google is not satisfied with the quality or performance of pre-roll inventory on YouTube.
"We want to learn who skips, which ads they skip, when do they get skipped, and how can we use that skip as a quality signal," said Phil Farhi, YouTube Product Manager.
YouTube has always had a queasy relationship with pre-roll advertising, which it began testing back in 2007 and formally rolled out last year. After those early tests, YouTube all but dismissed the format, stating users abandoned video clips at a rate of more than 50 percent. At one point, average abandonment rate climbed to as high as 70 percent.
Instead it began pushing its InVideo format, an overlay ad type that mimicked the clickable ad overlays pioneered by video ad networks like VideoEgg and YuMe. Yet large brand advertisers continued to request in-stream ad units, and YouTube capitulated -- offering 15- and 30-second pre-roll ads alongside video content from premium partners such as MGM and Sony.
Over time the performance of the ads has improved -- especially when they're short. Average completion rates for 15-second ads now average about 85 percent, YouTube says.
Initially, the "skip," button will appear only on an undisclosed percentage of video content that already carries pre-roll ads.
If a primary goal of ad skipping is to force ads to improve, how long does YouTube expect that process to take?
"I think that's unlikely to happen in the time frame of the next few months of this test," Farhi said. "But that's a goal -- to educate advertisers about what makes a high quality engaging ads and think about tailoring creatives to the online experience."
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Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
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