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Original URL: http://www.theregister.co.uk/2007/08/22/google_youtube_overlay_ads/

Google will carpet YouTube with 'overlay' ads

By Kelly Fiveash
Published Wednesday 22nd August 2007 11:08 GMT

Google will introduce a new advertising model for YouTube today which it reckons will be five to 10 times more effective than existing ad formats used on the video sharing website.

From today, semi-transparent animated "overlay" ads will show up at the bottom fifth of the video window for a few seconds when a user views a YouTube clip.

By clicking on the ad, users can see it in full with the original video being paused while an "in-video" ad launches. It can also be closed manually by the user or will simply expire automatically.

The new model is part of Google's attempt to ease investors' worries following the search engine giant's $1.65bn buyout of the video sharing biz last October.

Much of YouTube's success was built on a model that shunned commercialisation in favour of users sharing personal, and often copyrighted content, so finding a way to monetise the service without alienating the site's users has proved a big headache.

The concern for Google has been that encumbering the video site with ads could see its 100 million users log off in droves as they go in search of an ad-free alternative.

But it claims overlays will keep the "user community" happy while allaying investors' fears.

Google has been testing a number of formats with advertisers and big name content partners including Warner Music and BMW over the past few months.

It said the research showed that users were five or ten times more likely to click on and view overlay rather than banner ads.

Google's director for media platforms Eileen Naughton said: "What we have come up with is a user-controlled ad format that is engaging.

"We want our users to be able to accept and choose what type of advertising they engage in."

For the time being it said the ads will only be placed on video clips of its content partners, which include more than 1,000 small and large media firms that have videos licenced to YouTube.

Profit will be split between the media partner and YouTube and Google will charge advertisers $20 for every 1,000 times ads were shown.

Naughton said the restricted roll out will allow marketers to "acclimatise" to the new format before a decision is made on whether or not to the use the ads on user-generated video clips.

But, if it does get the full go ahead, one potential drawback of the new model could see big name firms having ads run alongside content they do not approve of. ®

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