Three Things YouTube Has Learned From Pre-Roll Video Advertising

And It Hopes to Learn More By Testing Skippable Ads

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Once upon a time, YouTube was a site that didn't believe in pre-roll. My how times have changed.

YouTube skippable preroll adEnlarge

Today it's launching yet another incarnation in its video-monetization plan: skippable ads. These have a small icon in the upper right offering viewers a "skip this ad" option. Clicking it takes one straight to the video.

Why might it launch such a thing? First of all, it believes it'll be able to command higher prices from advertisers for the ads because the users will actually want to be engaged and watching. But it also hopes giving people the option to skip will result in better research about what makes people want to watch an ad. Here are a few things it's already learned about pre-rolls:

  • Length matters. The site originally eschewed pre-rolls on short-form content because it said rates at which people would abandon the ad -- and the video -- were too high. But now that it offers 15-second ads, completion rates (the opposite of abandonment rates), hover around around 85%.
  • Creative matters a lot. YouTube compared how often people abandon online video ads to how often people change the channel during TV commercials (using Google TV data). Controlling for all other variables, said Phil Farhi, product manager at YouTube, creative appears to have three times the influence on abandonment rates on the web as it does on TV. His hypothesis for the difference? "Online video is a more lean-forward active experience whereas TV lends itself to passive viewing," he said -- perhaps making lousy creative more tolerable.
  • Choice is important. YouTube introduced a "choose your own ad" scheme this summer for long-form content -- people could choose whether to watch a longer ad up front or multiple ads throughout the content and they could choose what ad they wanted to watch. Since then, it's found a majority of people actually do choose what ads they want to watch. And, said Mr. Farhi, "once somebody chooses an ad we see a higher completion rate on that ad than for a corresponding pre-roll that we've chosen." Turns out people actually do know what they want.

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