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Main > Archives > 2007 > August > YouTube Move Could Kill Off Pre-rolls

Wednesday, August 22, 2007

YouTube Move Could Kill Off Pre-rolls

After a year, Google has finally figured out a plan for monetizing YouTube's traffic. Video overlays that hang out on the fringes of the video screen, will be the preferred ad revenue stream.

Google is touting these ads as less invasive and more likely to receive a click through. The company smartly is allowing advertisers to target viewers by demographic information, time of day, and which videos they will run against, so big name brands won't fear their products appearing alongside childish or obscene content.

The $20 CPM Google will charge is low by video advertising standards but high for user generated content. The first ads will run against professionally authored content, so rates my fall for UGC.

As YouTube goes so will the video advertising industry, so if pre-rolls aren't part of the mix and national advertisers are happy to develop overlays, that's where the majority of the creative will be.

Pre-roll ads have always been suspect, so this could be the death knell. Let's see how long it takes for other video sites to follow and shun pre-rolls.

By John Gartner at 01:18 PM | Comments (1)

(1) Thoughts on YouTube Move Could Kill Off Pre-rolls

There’s been a lot of discussion of how to value hot online video properties, like YouTube. There of course are many factors to this, but I propose a simple valuation model by using common web metrics to gauge user engagement. In other words, a simple way to value an online video property is in terms of not only how big its audience is but also how engaged they are (similar to a TV show). The more attention we have, the higher the prospects are for gaining advertisement revenue, and therefore the more valuable the property is.

Using this model we can also gauge what other online video sites might be worth by comparing user engagement relative to that of YouTube.

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Comments by Edward J Thomas : Wednesday, August 22, 2007 at 03:01 PM

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