'OMG Advertising!' YouTubers React To In-Video Ads

"OMG ADVERTISING!!" IS WHAT SPLITFORCES, one YouTube commenter, had to
say about the InVideo ads unveiled on the site last week. Scattered up
and down YouTube's comment threads, early reactions to the new format
varied from mean and critical to favorable and constructive.

A commenter named fardousha warned: "If ads invade youtube, i will
desert it," adding: "What attracted me in the first place is ads free
quality time. Long story short, it ain't a good idea."

"I really like the InVideo ad," remarked gsully224. "It is MUCH better
than a preroll ad, and more innovative and interactive."

Seconded gatorspit: "I think they did a good job with this, much
better then tacking [an ad] on the front like most video sites do."

The top video-sharing site online with a lively commenter community,
any change to YouTube's structure or design invites instant criticism
and discussion. To no one's surprise, YouTube's decision to finally
allow ads to invade the walls of its video player triggered a torrent
of user commentary last week.

YouTube's InVideo ads are semi-transparent overlays, which run at the
bottom of its video player, and stream for 10 seconds about 15 seconds
after a video begins. Many of the Flash animations are interactive, as
users can click through to an advertiser's linked URL or streaming
video spot.

Of the 20 or so advertisers that YouTube said are testing its InVideo
units, ads have already appeared on the site for New Line Cinema, BMW,
Fox and Warner.

As YouTube's rivals--and some of its users--have noted, YouTube is not
the first Web video company to experiment with Flash overlays.

"You ripped off VideoEgg!" commented bdc2005, in reference to the
video technology company, which has championed pre-roll video ad
alternatives since its launch in 2005.

Brightcove and Adbrite are at least two other companies with
experience in the area of overlays.

Like the response from YouTube's community, industry reaction to the
InVideo ads has been mixed.

According to Brightcove CEO Jeremy Allaire, advertisers are not
particularly fond of the overlay format.

"To our disappointment, there has been extremely limited uptake by the
advertising community around these formats," Allaire said in an email,
citing advertisers' continued preference for pre-roll ads as one
reason for the failure of overlays.

T.S. Kelly, head of research at Media Contacts, the interactive arm of
media-buying firm MPG, said he passed on the InVideo tests with
YouTube because the format is "unproven."

"I really wasn't too excited about it," Kelly said of YouTube's
initiative. "I'm excited about new opportunities around online video,
but I'm not really sure that this is going to move the needle for our
clients."

For Adam Shlachter, partner and group director at Mediaedge:cia's MEC
Interaction, the InVideo ads are fine, but he and his clients are more
interested in an ads' targetability.

"They could work depending on what a client is trying to achieve,"
said Shlachter. "But, I want to know how they plan on targeting the
ads. That's where things get interesting."

Going in the face of convention wisdom, Brightcove's Allaire insisted
that advertisers have not felt a consumer backlash from pre-rolls.

"For premium brands and content, the basic pre-roll and companion
banners are yielding extremely attractive CPMs and there is little
evidence that :15 ads have any negative impact on end-user viewership
behavior," Allaire explained in his email. "In fact, our own metrics
show that sites that run without any ads, and then introduce :15
pre-rolls and banners achieve identical usage and performance (e.g. no
drop-off in users because of ads) on their content."

If only due to the sheer novelty of the event, many YouTube users have
been actively seeking out the new ads.

Unable to find the spots, a commenter named adrigent complained: "If
we don't see the ad, how can we decide whether its annoying or just
nice??"

U.S. online video ad expenditures are expected to total $775 million
in 2007--up 89% from last year, according to market research firm
eMarketer. That number represents about 4% of the projected 2007 U.S.
online ad spend of $19.5 billion.

Separately, YouTube late last week rolled out several new community
features to further promote user engagement.

In an effort to encourage more "constructive" comments, while
deterring spam and abusive comments, YouTube is now helping its
community to moderate comments with a positive (+) or negative (-)
vote.

Users can now discover the top-ranked videos, and view the last five
videos that any user rated. The list is posted in a user's "channel."
People can also now see a video's rating history under "more stats."