Here’s a quick data point from Google’s (s GOOG) fourth quarter earnings call that could have massive implications for the way do video advertising: When talking about YouTube, Google SVP of ads Susan Wojcicki said that 60 percent of all video ads that appear on the site are TrueView ads. That means that when it serves up a video ad, more than half the time viewers can skip it and move on to the video before watching the entire ad.
The TrueView format, which launched a little more than a year ago, has quickly taken over as the dominant unit for video ads that appear on the site. With TrueView, ads generally play for about five seconds before viewers have the opportunity to skip them. The beauty of the TrueView ad is not only that viewers can ignore them, if they don’t find them relevant or appealing, but that advertisers don’t pay for skipped creative.
The incentive is then on advertisers to make good creative, and on YouTube to target the ads appropriately to increase engagement. So far, that appears to be working: Wojcicki said engagement ranges from 15 to 40 percent when viewers choose to actually watch an ad all the way through.
As a side note, CEO Larry Page noted that YouTube still had a lot of growth ahead and expected an increase in advertising on the site. But Page said that growth wouldn’t necessarily come at the expense of TV budgets, as advertisers generally weren’t shifting spend from other parts of their video budgets when committing to YouTube.