YouTube begins showing twice as many 'pre-roll' ads

The video hub chases TV dollars with more commercials and fewer interruptions

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Viewers will be allowed to opt out
Viewers will be allowed to opt out Credit: Youtube

YouTube viewers are starting to be fed two ads instead of just one in advance of the videos they want to watch, as the service takes another step toward replicating TV online.

The video site, owned by Google, developed "ad pods," which allow for a commercial break with two messages. They can run before a video or in the middle, according to Debbie Weinstein, vp of YouTube and video global solutions.

"YouTube continues to innovate and think about how we can make the ad experience as good as possible for the user," Weinstein says. "While delivering value for the advertiser and make it a platform that is helping make money for creators."

The ad pods are meant to play more commericals in succession while cutting down on the number interruptions in the middle of videos, so that four ads can be shown in two breaks, instead of over four separate, for instance.

"Users really like them," Weinstein says. "They prefer to be interrupted fewer times."

The ad pods will only run on desktops, for now, but will expand to all YouTube's properties on mobile and connected TV devices next year.

The ad pods are the latest expression of YouTube's gradually replicating a TV-like experience for viewers and advertisers. Not all videos will come with ad pods, YouTube says, depending on a variety of factors such as the length of the video. Also, viewers will be offered a prompt to dismiss the ad pods during a video and opt for the older breaks format.

Whether the strategy is successful remains to be seen.

"Why is online trying to replicate the TV model that we all believe is chasing consumers away from TV," says Jim Nail, an analyst with Forrester research. "This makes no sense."

What does make sense is that YouTube is increasingly being watched on TV screens, a migration from mobile devices and desktop. YouTube also is investing in longer-form videos, including Hollywood movies, which it now shows free with ads.

"One of the biggest dings against YouTube is that it is not premium and should be worth less than TV," says Tal Chalozin, chief technology officer at Innovid, a video ad technology platform. "That is the high-level Madison Avenue perspective, and YouTube is on a crusade to debunk that."

YouTube is expected to generate $3.4 billion in ad revenue in the U.S. in 2018, according to eMarketer, an increase of 17 perfect from 2017. Meanwhile, digital video advertising as a whole is growing 30 percent year over year in the U.S. in 2018, hitting $27.8 billion, or 25 percent of the entire digital ad market.

With ad pods, YouTube is speaking the language of TV ad buyers, telling them they can help improve "reach and frequency," the ability to hit more people in a brand's target audience with more regularity.

Nonetheless, YouTube is dealing with an audience that is notoriously sensitive to commercials and how long they have to sit through them. Pre-roll ads are knocked throughout the industry, wherever they appear online. Still, even Facebook, where Mark Zuckerberg was averse to ever introducing pre-roll video ads, bowed to the concept on the platform's Watch service, which launched last year as a rival to YouTube.

On digital platforms, whether that's on mobile devices or connected TVs, with Netflix and Amazon Prime, viewers are accustomed to no commercial breaks, Nail says.

"The question is can YouTube pummel people into submission to accept ads in places they don't want," Nail says. "Or will consumers rebel?"

The ad pods come in a few iterations. There is a skippable ad followed by a six-second ad, and if the viewer skips the first ad after five seconds, then the second ad won't run either. The six-second, unskippable ad can also run before the skippable ad. Finally, viewers might encounter two six-second, unskippable ads.

Even if people can't tolerate YouTube ads, there is always the option of paying for a $10 ad-free monthly subscription.

"There's no reason for YouTube not to test the ad product to see how users respond to the more upfront ads," says Mark Sytsma, associate director of paid social at Huge. "If it doesn't diminish the user experience, Google will sustain the product and advertisers will buy the space."

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