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Summary:

When it comes to selling advertising on online video, two different approaches are becoming clear: longer and broader, or shorter and targeted. YouTube’s current strategy reflects the latter, but studies show audiences are ready for a higher ad load. Is one strategy superior to the other?

family watching TV

When it comes to using ads online for effective monetization of content, two different approaches are becoming clear: longer and broader, or shorter and targeted. Currently, YouTube’s leaning towards the latter — in a column for marketing news site Clickz, Shishir Mehrotra, YouTube director of product management for video monetization, describes four ways in which video is fundamentally changing, while also laying out the new ad formats YouTube has recently created.

Advertisers buying into campaigns like YouTube’s new TrueView Video Ads, Mehrotra says, only pay for engaged views on a cost-per-view basis, with tools like user ad selection and in-stream ads making the experience more dynamic.

Mehrotra goes on to say:

These ad formats are just two examples, but the broader concept is simple. For years, TV has produced higher monetization by showing viewers more ads per hour. We believe that online video can help reverse this trend — we will eventually show users fewer ads, but get much more advertiser impact out of each ad view, and deliver even higher monetization to content creators.

This stands in direct contradiction to the strategy other video providers are drifting towards, following studies which show online viewers may be up to watching TV-sized ad loads on streaming television content. For example, the CW has been running an ad load nearly equivalent to broadcast on shows like Gossip Girl online, and finding that the audience watches 95 percent of those commercials, on average.

YouTube is a different playing field, though, where the smaller, targeted ad load approach may prove to be truly effective. Not only does it boast a large enough viewership to make even a smaller, specific audience meaningful –YouTube combined with other Google sites regularly dominate comScore listings by a hundred million viewers — but it has the audience metrics to really track what might be effective.

Short-form content is still king on YouTube; looking at today’s most-viewed videos, for example, only two of the 20 listed are longer than 10 minutes.

YouTube is championing relevancy over ad load right now — but yesterday, a TidalTV study study revealed that 30-second ads have higher click-through rates than 15-second ads, especially when properly targeted.

Shorter and targeted, everyone should agree, is the superior user experience, but more ads without targeting is easier to implement, and reflects a strategy mainstream advertisers may understand better. The approaches may be able to co-exist, but overall, the evidence suggests that while publishers are finding more effective ways to target audiences, audiences are also growing much more conditioned to watching ads online. And that fact may be tough for advertisers to resist.

Picture courtesy of Flickr user brizzlebornandbred.

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  1. Good article, it can definitely be difficult to determine if an ad should be broad or target specific. For example, a retailer of general merchandise has a wide range of customers so do they advertise to all of them at once or be more selective and highlight certain products? And under what circumstances would each option be more successful?

    Also, thank you for providing those interesting links- looking at the YouTube chart, it’s amazing to think of what are the most popular videos on the internet.

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