An Open Letter to YouTube

Dear YouTube,

Over the last few weeks, I’ve been reading a lot about how you want to preroll advertising to create ad revenue for your company. And why not? No one has more potential video inventory, and site traffic could potentially generate billions of dollars of advertising revenue that’s been so relatively) elusive.

Jon Fine of “BusinessWeek” says both pre- and postroll ads are currently being tested. Word on the street is these ads (at least preroll) will be much shorter than standard :15 or :30 fare. That’s good to hear.

The information you’ve released, though, has been cryptic and open to debate.

Were preroll ads rolled out across YouTube on a wide scale, though, you’d likely see one of the most precipitous drops in traffic that any site of your scale has ever experienced. People would go to sites that don’t put preroll in front of everything (while they still exist, that is).

Here are some suggestions if you’re going to do preroll.

Keep ‘Em Short. Really Short

Face it: no one wants preroll, except your advertisers. There are so many other options for people to consume, share, and edit videos that your niche could become fragmented pretty darn quickly, and MySpace is on your tail. Even if prerolls will be limited to a certain number or type of videos, they still need to be short. Like three-seconds short. Seconds feel like an eternity when they’re impeding enjoyment of a short-form video — especially when quality is questionable.

Democratize the Testing Period

Make sure the testing period is thorough. I know I don’t need to tell a Google company about testing, but don’t just test effectiveness for advertisers. Test the experience for consumers. Focus groups, comments, blog posts — use them to determine what reception this move will receive. Facebook tweaked one site feature, and its users overwhelmingly objected. Digg censored some Dugg articles, and the blogosphere went crazy.

This will be no different. Be prepared by testing audience reception thoroughly. Keep an eye on the video views that have preroll versus those that don’t. Precipitous drop-offs don’t bode well.

Stick to the Good Stuff, or Allow Uploaders to Opt In

Revver‘s postroll model isn’t bad, per se. It keeps the ads at the back of content, making them nonintrusive. Who wants to sit through an ad of any length in front of a :20 clip that may or may not be entertaining? The exception would be a :20 clip guaranteed to be worth watching; meaning, it was created by an established professional, rated highly by hundreds of thousands of viewers, or uploaded by someone who elected to have advertising in front of it.

Though having ads in front of user-generated content seems to be a great way to leverage (and create) inventory, how willing will advertisers be to place their ads in front of content that doesn’t fit their brands? And will approved content creators be compensated? Will there be any approvals at all? There are lots of questions here, and we’re all looking forward to the answers.

Leverage Google

Google has built a pretty good business on search and contextual ad delivery. If you apply that business to YouTube, you can offset negative consumer reaction (to a degree) by making those ads more relevant not only to the content but also to the consumer.

Explain Changes to Users

When Google purchased YouTube, Chad Hurley and Steve Chen made a video explaining why the move was made. That video quickly became one of the most popular videos on the site, in the blogosphere, and on TV. Hurley and Chen are the faces behind YouTube and what keeps the site human — like Kevin Rose at Digg. At the very least, they should make another video explaining this major change. What they should really do is create an area within YouTube such as that explains why the change was made, in layman’s terms, to the people who matter most — users.

Whatever decisions you make, whichever road you take, I’m sure you’ll do the right thing. You’re too smart, too innovative, and too important to fail.

I’ve spoken frequently about how preroll should be avoided. While I think there can be a place for it on YouTube, any moves you make should begin with the suggestions above.

Or you can forget about preroll altogether, and opt to take a graphic or text overlay approach instead and charge advertisers on a CPC (define) basis like your dad does.

Just a suggestion.


Ian Schafer

P.S. Keep up the good work in launching new features, and keep growing the blog!

Meet Ian at the ClickZ Specifics: Advertising in Social Media seminar on May 21 in New York.

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