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Google puts ads in YouTube video clips
22-08-2007
by Ciara O'Brien

Google has come up with a way to make its billion dollar investment in YouTube pay dividends -- by including advertising with the clips.

According to the search giant, the new advertising model will be up to 10 times more effective than the ads that are currently on the video website.

The new ad format includes semi-transparent animated "overlays". These ads will be placed on the bottom of video windows while the clips are played, beginning a few seconds into each clip, and can be clicked on to open the ad in full.

Viewers are given the option to close the ad, or wait for it to play itself out. If users choose to investigate the ad further, the original video clip is paused. Viewers will also be able to comment on the ads shown. The new format will be rolled out across the sponsored sections of YouTube's site.

The tech giant has been hard pressed to prove that the USD1.6 billion it paid for the consumer generated media site in October 2006 was worth the price tag. Analysts have expressed concerns that the site would not be able to generate the revenue needed for Google to make a return on its investment.

The firm thinks it has hit on a winner with the new ad formats, testing the proposed ads with advertisers and content partners including Warner Music and BMW.

However, it remains to be seen if Google can live up to its promises of the ads' effectiveness -- and if users will tolerate them. Although Google claimed trials showed less than 10 percent of people closed the ad down, and 75 percent actually viewed the full ad, YouTube's loyal fanbase may not be so enamoured of the site's commercialisation.

YouTube has in the region of 130 million YouTube subscribers. However, since Google took over the site, the firm has been dogged by threats of legal action for copyright infringement from various sources who want their work removed from the site, including Viacom.