Early Results Roll In for YouTube's New In-Stream Ads

Online video ads have shortened in response to low completion rates, from standard :30 spots to :15s and even shorter ad lengths. But there is no time limit on YouTube’s new TrueView in-stream video ads, which were introduced late last year.

That’s because they’re skippable. Viewers can close the ads after five seconds to resume their chosen YouTube video. Advertisers only pay when users watch their ad for 30 seconds, or through to completion.

“Skippable ads that pay only on engagement are new for us,” said Phil Farhi, a YouTube product manager. “We’re moving from a cost per impression to a cost per view model and it’s a big shift. It signals that the ad is relevant.”

GoPro, which makes sports cameras, was one of the first TrueView advertisers, starting a four-month beta test in October that has just wrapped up. The company ran 30-, 90- and 120-second ads consisting of footage shot by athletes using its cameras. “We create ads that are engaging and entertaining to watch, regardless of whether you’re interested in buying a camera,” said Lee Topar, GoPro’s director of online marketing.

Topar said 35 percent of viewers who were served GoPro ads watched them in their entirety.

It’s not clear how much that completion rate correlates to other advertisers’ use of TrueView ads. YouTube declined to provide overall viewer numbers or completion rates. “We see a large variation from one ad to the next; it depends on the content.”

When asked where the GoPro ads played, Topar couldn’t answer, because YouTube determined their placement. But advertisers do have targeting options. Farhi said, “They can target broadly, match it to the product they’re selling or demographically.”

YouTube sells TrueView advertising on an auction basis, similar to search and YouTube’s other formats. Farhi declined to provide the current number of TrueView advertisers, but said, “Interest is very strong. We have a lot of advertisers used to the cost per view model and the extension to TrueView is very natural.”

Thus far, all advertisers have been companies with YouTube video content, but he said it would be available to any advertiser. “A network of third parties will emerge to manage the campaigns, including ad networks and agencies,” Farhi said.

Farhi wouldn’t divulge the CPM or cost per view rate for TrueView ads, saying it varies depending on how good the ad is. For example, an advertiser that bids 10 cents for an ad play and generates a 10 percent view rate will pay less than an advertiser who bids 5 cents and gets a 50 percent view rate.

There are two versions of TrueView ads now playing. The first are in-stream ads which play as pre-rolls or mid-rolls against long or short form content. The second are ‘InSlate’ ads, which play with long form content. Unlike YouTube in-stream ads, InSlate ads do not allow users to skip an ad after five seconds. But viewers are given a choice between either selecting one of three ads that will appear before the content plays, or seeing regular ads at intervals during video play.

Michael Greene, a Forrester Research analyst, noted the InSlate ads follows in the footsteps of Hulu’s Ad Selector format. That ad type was dubbed the ideal video ad format last year by Vivaki’s “The Pool” initiative.

“Marketers expect more accountability from online advertising and these formats are creating a highly targeted ad experience,” he said. “If they make sure the user is engaged and opting in there’s a high value and they can charge a higher CPM for that.”

Here’s a sample TrueView ad:

 

Correction: An earlier version stated advertisers only when TrueView ads are watched to the end. In fact, advertisers pay when ads are watched for 30 seconds or to completion.