YouTube Advertising Overlay – Progress for Video Publishers

August 22nd, 2007

Much has been said about the need to figure out advertising models for online video. Viewership is moving online at a rapid pace, but advertising has yet to follow at the same rate (despite this year’s 79% growth over last year forecasted by e-Marketer).

Most agree pre-roll ads aren’t the solution, and there are a plethora of companies working to create a winning solution. But YouTube’s announcement to overlay videos with advertising is the first to make a big splash beyond the pages of the blogosphere, which isn’t a surprise, since they are the market share leader by a long shot (49% by recent estimates). What’s great to see is the data YouTube has shared on the engagement of the ads, which are clicked 5 to 10 times more than banner ads (NY Times article) and 75% of those that clicked watched the entire ad (more under the term of “participation” here).

This is great news for video publishers, especially those creating online productions as a full-time gig. Is YouTube the only one with this type of technology? No. VideoEgg has had this type of technology for over a year, and creators can also use technology such as VideoClix on their own sites to do much the same as the new YouTube ad serving technology, but by clicking on objects in the video. I haven’t used VideoClix, though I saw them demo at last month’s Pier Screening event in SF.

Beet.tv wrote about overlay technology through Metacafe and adap.tv back in May. So why all the buzz now? C’mon, it’s YouTube!

More on the recent announcement:
WSJ (subscription required)
Jim Kukral HowToDoVideo
NewTeeVee

Update: Here’s a great comparison of ten online video ad competitors compared from Mashable.

Entry Filed under: New Media/Old Media, Video Advertising, Video Analytics