YouTube Wants Pre-Rolls Skippable

As it prepares to bring TV-quality content to the Web with a slew of new channels centered on original content, YouTube is handing users a built-in DVR. That’s irking some in the burgeoning online video industry, who worry that the Web’s biggest company is training users that they need not watch ads in exchange for free content.

But YouTube says doubters have nothing to worry about. The company has revealed several new statistics that, it says, support the idea that providing users the option of skipping ads will hardly destroy the Web video economy — and may actually make it more valuable.
Per YouTube, 50 percent of all the in-stream ad inventory on the site is now being skipped — a four-fold increase since February of this year. That’s a stunning 18 years of video each day, according to YouTube. Why has YouTube rolled out TrueView ads so quickly? Because on average 15 to 45 percent of users elect to watch such ads. And compared to pre-roll, TrueView ads decrease audience drop-off rates by 40 percent.
YouTube believes such response rates prove that users are willing to watch ads, and they respond better when they feel like they’re in control. And advertisers only pay for users who actually watch their ads.
“We think that in this scenario, all parties win: content producers, advertisers and users,” said YouTube senior product manager Baljeet Singh.
Why else dial up the number of skippable ads? To ensure scarcity, and hopefully high CPMS of course. While YouTube has increasingly become a must buy for big Web advertisers, it still has a ways to go before it can lay claim to the TV dollars that are flowing to broadcast TV sites and Hulu, which typically attract hefty CPMs. The goal of competing in that realm is why YouTube wants TrueView to bolster the value of its video ads, and why it’s in business with the likes of Ashton Kutcher and Shaquille O’Neal.
Among the content producers that have successfully tested skippable ads are HGTV, Machinima, The Onion and Howcast. YouTube hasn’t said which of its 100 or so new partners will employ skippable ads, though it’s assumed that some will. And with YouTube content playing a big role in the revamped Google TV, it’s possible that we’ll see lots of skipple YouTube ads on TV as well.
Many Web content companies, including several with roots in the TV world, are not wiling to publicly criticize YouTube’s TrueView strategy, but they don’t like the precedent skippable ads set. Between Hulu’s push to present viewers with a set of choices among advertisers, to VivaKi’s cross-company initiative to push the Hulu-inspired ASq ad treatment, the industry is rallying around providing users choice, but not complete control of the online video ad experience.
While Singh would not discuss individual advertisers nor dollars (nor would he confirm YouTube’s upcoming content partnerships), he said that thousands of advertisers have tested skippable TrueView ads and that the offering had attracted new advertisers to YouTube. Among the brands involved are several political campaigns, including U.S. Senate candidate Ted Cruz (Texas) and Florida Governor Rick Scott, as well as HP, Lionsgate and Vodafone.
“We think this proves that users don’t want to skip all ads,” said Singh. “We also think this makes these ads more valuable. For example, when users are flipping through a newspaper, you don’t necessarily know which ads they’ll see. With TV you don’t know if they are sitting there when an ad runs. With TrueView, you have a highly engaged user.”
Thus, YouTube is planning to widely expand TrueView. First, the company will rollout skippable ads to its Google Display Network. And starting on Nov. 17, users will start seeing TrueView treatment in YouTube Promoted Videos and Google Click-to-Play ads.
YouTube’s reach could put a ton of pressure on the Hulu, Tremor, YuMe and network sites to cede more control to users. And if professionally produced YouTube series/channels prove to draw series audiences — particularly on TV — YouTube could end up indirectly putting pressure on the current 30-second-spot-centric TV business model.

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