YouTube Formally Launches Sponsored Videos

YouTube formally presented its search ad product today, called “Sponsored Videos.” We had reported on the format after it was spotted in the wild last month.

YouTube is finally utilizing its parent Google’s area of expertise to try to make some money, though it readily admits that searching for video is quite different than searching for web pages.

“Google search is very directed,” said Matt Liu, product manager for Sponsored Videos, in a presentation at YouTube headquarters. “YouTube search is at the other end of the spectrum, you’re very open to being entertained.”

With that in mind, Sponsored Videos are meant to fit into the normal YouTube experience by directing searchers to clips they might be interested in. Content creators will be able to use the product to seed a viral campaign, for instance, or to launch a new series. But that means would-be advertisers will have to have YouTube accounts with their own videos in order to even participate.

sponsored-videos-video-gameThe product helps advertisers target keywords in a cost-per-click auction similar to Google’s AdWords. Ads themselves have a thumbnail and three lines of promotional text, and always point to a YouTube page. Sponsored Videos has been tested by “several dozen advertisers run over 100 campaigns,” said Liu, with varying results due to the quality of the keyword targeting and the popularity of the video.

YouTube declined to comment on how significant the product would be as part of its advertising suite and its total revenue.

YouTube is under pressure to give Google a return on its investment; notably, Google CEO Eric Schmidt has recently been making public remarks to that effect. Some recent ad products include: pre-, mid- and post-roll ads lasting 15 seconds for long-form CBS content (and now MGM), affiliate links to iTunes and Amazon, automatically playing post-roll ads rather than leaving them static until a user clicked on them, and expandable HD homepage ads.

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