Google believes it has finally has found the formula to cash in on YouTube’s potential for online video advertising and at the same time, keeping its audience loyal.
Google will be introducing a new type of video ad, which it said was unobtrusive and kept users in control of what they saw. According to Eileen Naughton, Google's director of media platforms, to start with Google is selling overlay advertising on a limited number of YouTube videos to a select group of partners at a cost of $20 per 1,000 viewers or $20 CPM. Initial advertisers include BMW, Ford Models, and Warner Music Group.
The ads, which appear 15 seconds after a user begins watching a video clip, take the form of an overlay (a translucent banner of sorts) on the bottom fifth of the screen, unlike the tickers that display headlines during television news programs or various shopping networks. A user can ignore the overlay, which will disappear after about 10 seconds, or close it. But if the user clicks on it, the video they were watching will stop and a video ad will begin playing. Once the ad is over, or if a user clicks on a box to close it, the original video will resume playing from the point where it was stopped.
Google will place the ads only on video clips of its content partners, however we’re not quite sure what content partners they are referring to — more than 1,000 small and large media companies that have licensed their videos to YouTube. By doing so, YouTube will avoid the potential liability of having ads appear on copyrighted clips it is not authorized to display. And it will also prevent ads from playing on clips generated by users whose message may not be to the liking of advertisers.
The revenue from the ads will be split between the media partner and YouTube. Ms. Naughton also said advertisers would be able to take aim at specific channels and genres, as well as demographic profiles, geography and hour of the day. If successful, the video ads could persuade more media companies to license their content to YouTube as a way to make money from it, analysts said.
Google also that it has added video news clips to the
Already existing video ad networks
Social video ad network VideoEgg’s Troy Young, chief marketing officer said that they invented the video overlay ad about a year ago. Another upcoming video social site is blipd.com
You can take a look here at Video Egg’s overlay ad:
Possible metrics
To make an estimate let’s say that banner CTR % varies from 0.02% to 0.05% (based on one of our B2C client’s data). Let’s take banner CTR average as 0.03% and say the overlay ads at 8 times more than banner ads.
Then I would be looking at a CTR of 0.24%
According to Compete.com, YouTube had 150,652,781 visits to its site in April 2007.
Taking this as an average – 150,000,000 visitors x CTR of 0.24% = 360,000 visitors to my site Taking an average CR of 1% (standard across banner campaigns and PPC), I would get 3600 registrations or leads.
Now, the cost bit – if Google plans on charging $20 CPM, then my cost would be $300,000 and I would end up with a CPA of $830!
This is of course assuming that ALL visitors would see my ads and it would be displayed on ALL videos. Once you categorize your ads and display it in proper genres, the visitors would be much lesser.
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