Internet giant makes a hope and a prayer for serious revenue from limited video advertising
Exactly three years ago from this November 13, Google finalized its $1.65 billion (in Google stock) acquisition of YouTube, now the most popular video site in the world. Unfortunately for its tech giant parent, however, YouTube has yet to bring in the cosmic revenue stream that everyone claims it should.
In part of a series of more aggressive efforts to make YouTube pull in greater revenue, Google is testing skippable pre-roll ads in YouTube videos starting Wednesday,
MediaPost reports. Skippable pre-roll ads start playing automatically before the actual video, but users can opt out of the ad at anytime by clicking a small "Skip this ad" button in the corner of the video.
The changes will only be visible by a small number of content partners initially, but this form of advertising could potentially blanket the whole site, if Google sees a successful monetization model in the opt-in form of advertising.
In the meantime, MediaPost says that Google will be looking at the limited tests to determine what kind of person skips ads, what kinds of ads are often skipped, or how the actual video content affects ad viewing.
Though many video sites already feature pre-roll ads on all their videos, Google could have a different (and potentially more intelligent) model in which advertisers only pay for ad spots that users actually let roll through. Just as businesses don't pay for ads that go unclicked on Google Search, so too would businesses be exempt from paying for ads on YouTube that go unwatched.
Re-implementing pre-roll video ads will be a big step for Google and it already appears to be one they are not taking lightly. Back in 2007, Google found that 70% of viewers decided not to watch a video if it began with a pre-roll advertisement. This time around, ads will be more targeted, relevant, and, perhaps most importantly, skippable.
Will this be the YouTube monetization savior? Not necessarily, but it shows that Google hasn't given up finding one yet.
Steven Loeb
