Has YouTube Figured Out How to Monetize Video?
In a recent announcement, YouTube is bringing its TrueView video ads to mobile phones and tablets. TrueView gives viewers the choice and control over which messages they want to see by allowing them to skip the ad after five seconds of viewing. Advertisiers are charged when viewers have chosen to watch their ad, not when an impression is served. According to YouTube General Product Manager Phil Farhi, “The broad goal here is around aligning user experience and advertiser goals in a way that delivers a more accountable advertising platform to advertisers and the brand, as well as a better user experience.” According to Ad Age, “YouTube says that 65% of pre-roll ads on YouTube now allow viewers to skip them.”
Surprisingly, advertisers seem okay with the new system, partially because they’re only charged for advertisements if viewers don’t click the skip button. That could potentially save advertisers lots of money, while delivering them a more targeted and qualified audience, presuming that viewers who watch the commercials are interested. For viewers, it means less obnoxious and unwanted advertising.
On the surface, it would appear that this is could be the magical formula for everyone involved. People online are increasingly choosing to be informed and entertained by video, advertisers are looking for ways to capitalize, and content producers/publishers need effective ways to monetize.
- Does allowing viewers to skip ads make for a better experience?
- Does charging advertisers for the ads that aren’t skipped deliver a better ROI?
- Will this model ever deliver the revenue streams producers/publishers are banking on?
The digital world gives people unprecedented control over the content they are exposed to. It also affords companies the ability to engage with audiences in two-way communications that facilitate authentic conversations; thereby, facilitating valuable relationships. Instead of trying to deliver clever ads, the focus should be on delivering clever videos. Videos need to begin living up to their true capability by becoming a “window to the web,” empowering viewers to discover, learn, share, collaborate, purchase and play. Viewers get the experience they long for, companies gain valuable inbound leads and producers/publishers create countless ways to make money.