YouTube Tries Bigger Home-Page Ads

Experiments With New Format in Effort to Boost Revenue

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NEW YORK ( -- YouTube blew out one aspect of its money-making plan last week: way bigger home-page ads.

YouTube gave Lionsgate two rich-media units and exclusivity on its home page to advertise 'The Haunting in Connecticut.'
YouTube gave Lionsgate two rich-media units and exclusivity on its home page to advertise 'The Haunting in Connecticut.'
YouTube started experimenting with giant masthead ads across the top of the page late last year. Electronic Arts bought the space to promote the video game "Spore," Universal Pictures promoted the next "Fast and the Furious" there, and ABC advertised the new season of "Lost."

But on March 20, YouTube pushed it a bit further, giving Lionsgate both the masthead and the standard box unit on the right for a new unit it's calling a "cross talk" ad. It promotes the studio's upcoming horror film, "The Haunting in Connecticut," which opens March 27.

Huge amount of real estate
The difference there was that YouTube gave one advertiser a huge amount of real estate in two rich-media units, plus exclusivity on the page. YouTube executives declined to say what it charged for the privilege, but one person with knowledge of the deal said the Lionsgate ad was part of a $500,000 integrated buy that included search and display across Google's network.

The rate card for a YouTube front-page roadblock is $175,000 per day, plus an incremental $50,000 in additional spending on Google or YouTube, but like all media, it can be had for a lot less. Still, it's a big step up from the standard box placement on the right, which has sometimes sold for as little as $60,000 a day.

We've been hearing about YouTube's plans from agency insiders for some time. Adam Stewart, Google's industry director for media and entertainment, said the video site is still experimenting with formats, and it'll watch its new "cross talk" unit to see how it performs and how users interact with it.

Advantage with entertainment advertisers
It's no surprise an entertainment company was the first to give the new format a whirl. YouTube gets 30 million visitors to its home page daily, all looking for video and many right smack in the middle of studios' favored demographics. "People are coming to YouTube specifically for video. I think that gives us an inherent advantage when it comes to working with entertainment advertisers," Mr. Stewart said.

For YouTube, the home page is low-hanging fruit compared with the bigger problem of how you sell amateur and semipro video to skittish advertisers. YouTube serves 56% of all videos on the web in the U.S. according to Nielsen, but revenue has been elusive.

YouTube execs are hoping that, done right, the new ads will be an attractive palette for better creative, such as Apple's display ads on the New York Times and Wall Street Journal sites.

"It's how do you create an ad unit that doesn't feel disruptive to users going there who are not looking for ads?" said Eric Druckenmiller, media VP for Deep Focus, which does work for entertainment industry clients such as HBO, Fox Searchlight and Miramax. "If you create a compelling ad unit, it could be something people could look forward to, and that's when you can charge a premium."

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