Monday, September 24, 2007

Google InVideo: The future of advertising. but where are you?

Soon after the announcement about integrating video feeds in their news services, Google have practically launched a limited version of their new video advertising format branded Google InVideo designed to be used on YouTube. Starting August 21, clicking on an animated overlay area of a Google InVideo ad in some selected YouTube partner videos, launches a deeper interactive video ad defined as relevant and entertaining based on the clip content and while the watched video is temporarily paused. If not clicked within 10 seconds the overlay disappears allowing YouTube users some control over their content/advertising mixed experience.

The world has been talking about a new video advertising format ever since it was clear where high-bandwidth internet deployment is heading to. Both video sharing and casual game websites have been looking for a way to stop forcing their users to watch an ad before pushing the usually very short piece of content they were looking to consume. Yet, even though Google popularized the video overlay advertising format, it seem to have been in use by smaller companies such as VideoEgg, a video advertising start-up in San Francisco that has been serving overlay ads for nearly a year and Adotube and LiveRail who joined the game recently.

According to the NYT, Preroll ads are still the most common form of online video advertising so far. Yet, Eileen Naughton, Google’s director for media platforms, says during their tests, YouTube "users clicked on overlays five to 10 times more frequently than on banner ads that already appear on some YouTube pages". Troy Young, VideoEgg’s chief marketing officer, says both preroll and midroll ads (appearing in the middle of a clip) "may be appropriate for television shows, movies or other long videos but overlays have proven effective at making money with short clips".

Scott Karp an influential digital media blogger and editor of thinks that video advertising is about to cross the Rubicon into a pay-for-performance business model, but at the same time suggests we'll have to wait and see about that for a very simple reason:

"In the traditional TV ad model, it was opt out, i.e. you had to change channels, get up to get a snack or go to the bathroom in order to avoid the ad. Now, it’s opt IN. And now we’re going to find out what people REALLY think of video ads, which Madison Avenue has always known in its heart but has never been able to admit. The ads may be unobstrusive, and YouTube has mountains of videos to insert the teasers into - but if nobody clicks…"

I tend to agree with Scott from about the need for Google/YouTube to prove their new model validity facing reality. Changing the face of the video advertising world is not a simple mission. Have you seen any InVideo advertisements? Allow me to predict you haven't. I am an avid YouTube user myself (check me out here), I researched the subject, read many articles and I still couldn't find even a single working example. If it wasn't for
Shawn Collins of who posted a live example of the YouTube overlay ads I would have finish writing this post without even getting to see a single InVideo ...

The TV industry has never been forced to the same standards the online video industry now has to face but LiveRail CEO Mark Trefgarne expects Google to be able to obrtain a CTR rate of about 4-5% with a $20 ad spend yielding about 40-50 views, working out at $0.45 per view. Yet, "if your ad gets lower CTRs," predicts Trefgarne "then your PPV will rise rapidly".

I wouldn't worry about Google too much. When it comes to a direct conflict between the old media dinosaurs and the newest dot com evolutionized creatures - who do you think will be taking the pretty girl home? The network blog Last100 published this excellent caparison between tomorrows video advertising languages and yesterday's less intrusive format of promotional animations that run on the bottom of television shows.

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