Preempting Pre-Roll

Don’t you just hate forking over $10.50 at the box office, then sitting through half an hour (or more) of commercials and trailers?

Pre-roll ads are hardly native to the Web. They’re an import, a somewhat uncomfortable offline transplant with origins in push advertising and mass media. The online destiny of this very prevalent, often-maligned video ad format may be hastened by (you didn’t hear it here first) Google’s acquisition of YouTube.

It’s almost as if Google’s placed a $1.65B bet against the format.

Neither Google Video nor YouTube runs pre-roll ads on its site, unlike rival portals and most commercial broadcast Web sites. Meanwhile, practically everyone who’s anyone in terms of ad-supported video content — Yahoo, AOL, MSN, MTV, CNN, CBS, NBC, iFilm, AtomFilms, ESPN Motion, Sony BMG, the New York Times Company, the list goes on — nearly always obliges viewers to endure a non-skippable TV commercial before delivering the goods.

Pre-roll is growing even faster than online video advertising, which is certainly enjoying its own hypergrowth spurt. Pre-roll video inventory on commercial sites has grown an average 105.2 percent annually over the past five years, according to AccuStream iMedia Research. Free and ad-supported content streams, meanwhile, averaged 72.3 percent growth. The pre-roll insertion ratio is nearly 1 to 1 (one pre-roll for every content stream accessed), which AccuStream said in July indicates a marketplace of over 1.13 billion pre-roll ads per month.

As publishers increase the amount of video content they offer, these numbers just keep rising.

Will there be a backlash?

“What makes pre-rolls attractive to advertisers — but off-putting to viewers — is that they don’t allow fast-forwarding,” opined “The Wall Street Journal” in a recent article about the format.

Shouldn’t the phrase “off-putting to viewers” sound an alarm with advertisers and publishers? Logic would seem to dictate this sort of reaction would make the format substantially less attractive than advertisers may like to believe.

“We think there are better ways for people to engage with brands than forcing them to watch a commercial before seeing content,” YouTube’s cofounder and CEO Chad Hurley told “The Journal.” “You could ask anyone on the Net if they enjoy that experience and they’d probably say no.”

While the vast majority of major video sites are zigging with pre-rolls, YouTube is zagging with decidedly more Web 2.0 brand channels. Advertisers get feedback from consumers who elect to view their messages. The site is also selling user-initiated participatory video ads on its home page.

Earlier this week, a trailer for Paramount’s “Freedom Writers” was prominent on YouTube’s home page. It’s exclusive to the site. Interesting thing about trailers: They’re ads, but they’re also content. Personally, I’d rather watch one by opting in than when it’s pre-rolling in front of a film I just shelled out $10.50 to see.

A little lower on the page, but still above the fold, is a link for Cingular-sponsored YouTube Underground, a contest for U.S.-based bands and musicians. Click, and you know what you’ll get.

On other video sites, users are too often caught unawares. They don’t know enduring a pre-roll ad prior to viewing what they want to see is mandatory. To make matters worse, pre-rolls are only very rarely frequency capped. Want to watch five clips from a favorite TV show? Can do. Provided you agree to watch the same :20 spot five times in a row.

Who cares how comfortable advertisers are with a familiar format. That’s worse than TV.

This practice may also be a contributing factor to the amount of copyright material YouTube so notoriously hosts on its site. It can almost be considered a public service. Anyone can grab VideoDownloader, edit out the pre-roll, and share the content. Another site I know (but won’t name) feeds a link to a torrent of the previous night’s “Daily Show” daily. It’s in my feed reader before I wake up in the morning.

YouTube has demonstrated it possesses the creativity, patience, and commitment to experiment with video ad formats that work for viewers as well as for advertisers. Its new owner has the resources to support that mission for a long time.

Any ad executive at one of the major portals or video sites will tell you she knows pre-roll isn’t the answer. They all say they encourage their advertisers to experiment, that it’s too early to determine what ad formats will work for online video.

Google’s acquisition of YouTube will almost certainly accelerate this learning process. Ultimately, that benefits everyone.

Meet Rebecca at E-Mail Marketing, the first in the new ClickZ Specifics conference series, October 24-25 in New York City.

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