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YouTube this week caved to pressure to turn its consumer-friendly platform into just another intrusive ad vehicle. While some users have reacted positively, most are not amused.
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Doctor to Patient: I have good news and bad news.
Patient: What's the bad news?
Doctor: You have 1 month to live, give or take 4 weeks.
Patient: What's the good news?
Doctor: I just saved a bunch on my car insurance.
This week YouTube announced that they would be giving in to the pressure to turn their consumer-friendly platform into just another typical intrusive ad vehicle. Perhaps it was pressure from the Google vultures or perhaps it was just the inevitability of time. (I'm facing similar debate with my recent podcast monetization efforts, albeit on a scale of 1:1000000000000000.)
It's funny...a while back, I had a breakfast meeting with Chad Hurley, which was set up by their then head of ad-sales (ex-Yahoo). We chatting about a few advanced ad models and I gave my vote of confidence to some of their efforts, such as channels and also their less intrusive video-based ads that were 100% "user" initiated. Then, unceremoniously, their head of ad sales promptly left and I never heard from Chad et al again. Pity, as I would have counseled them categorically AGAINST this dumb effort.
Somehow their (read: Google's) spinmeisters managed to convince the press and trades that this story was all about shunning pre-roll ads. Certainly, when I saw the headline my heart soared. Sadly, this was in fact just a front to mask an overlay ad (interactive folk: can you say Eyeblaster, Shoshkeles, etc.?) which IS NOT INITIATED BY THE "USER". What a giant step backwards! What a cop-out! What next? Uninitiated audio as well?
While some bloggers and commentators have react positively, I am not amused.
In fact I am stunned by this blatant anti-consumer stance as this quote from YouTube's product manager suggests:
A 15-second spot placed before YouTube videos resulted in a 75 percent abandonment rate. The overlay style generated just a 10 percent drop-off.
Why should this ever have to be about lesser of evils? Why would YouTube basically admit to shunning 10% of their audience and consumer base? Beware. Beware. Today's 10% is tomorrow's 50%, especially if they are influencers and especially if you give your competitors (can you say broadcast networks?) half a chance to go for the jugular based on any exposed nerves.
Here's a thought: less intrusive is still intrusive -- AKA: if it looks like an ad, feels like an ad, smells (stinks) like an ad...then chances are, it's probably an ad.
...but don't take my word for it. Why not just let YouTube customers do the talking as is evidenced by the comments on its own blog post:
Mainyard48 (posted Aug 22, 2007, 06:59 PM)
Worst idea ever. When I start to see that crap, it'll be time to unsubscribe. I have no problem with sitting through a pre-roll . At least that won't obscure the actual content I wish to see.
crowcity (posted Aug 22, 2007, 10:01 PM)
That sounds TERRIBLE!!!!
b33p (posted Aug 22, 2007, 09:19 PM)
no thanks.
theestranger (posted Aug 22, 2007, 07:19 PM)
When television started adding ads like this to their shows, I thought "And these people wonder why ratings are constantly down...". There are better ways to make money Google.
tompty (posted Aug 22, 2007, 04:51 PM)
please dont do this google. its a really really bad idea, as you can probably tell from 99% of the comments below. we are constantly bombarded with companies trying to cram their advertising into our heads. youtube is currently a true sanctuary for original and unadultered entertainment. with many hollywood "blockbusters" having their scripts changed around a company for product placement ( McDonalds in "The Weather Man" etc etc etc etc!! ) why take away the truly first and revolutionary form of independent media that youtube has so far allowed! Is it not obvious simply why YouTube has had so much success until now? Anyways, i would hate to use so far lesser media content sites as i really like it here. But Whatever, Maybe you could get Daxflame to wear a Pepsi tie or something..
To be sure, there are positive comments as well...but for the most part the comment negative:positive sentiment certainly exceeds a 1:10 ratio.
Oh well, this will be the day YouTube moved from the conversation to the communication business.
One small step for Google, one giant leap backwards for YouTube and its customer relationships.
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Comments
What is a better alternative? Preroll ads are terrible, postroll ads wouldn't work.
Posted by: mgroves | 08.23.07
"In its test, Google said the ads got click rates of 1-2 percent, with 75 percent of clickers watching the message all the way through."
It seems as if they've resolved themselves to the advertising failure. A 1-2% click rate is not indicative of engaging content.
I understand they're under a lot of pressure to increase revenue, but that's no excuse to make a choice that 1) fundamentally inconveniences their audience and 2) performs no better than banner ads.
Posted by: Cam Beck | 08.23.07
@cam - ridiculous that they're taking credit for people ignoring the ad
@mgroves - actually I prefer a post-roll to this as it will only play out if it is acceptable to the "user". Most will close out but at least its an engaged and non-inteusive impression. It also puts more pressure on the creative to perform.
Posted by: Joseph Jaffe | 08.23.07
Joseph,
A post roll isn't sellable, despite what you prefer. It's just not. Why would I pay for an ad "after" the message was delivered? It would be innefective, completely.
And I don't think Youtube "caved to the pressure". Not one bit. This was the plan from day one of buying YouTube. I bet this was the plan of YouTube people before they even sold to Google too.
You may think this is a "dumb" move, but I disagree. It was a smart move to do this early enough in this new online video game, BEFORE it's get even bigger than it is now.
Look, when YouTube launches its business channel/plan, and starts moving away from skateboarding videos, this will all make sense even more I believe.
The question I have is will the ads really be effective if they aren't targeted well enough?
Posted by: Jim Kukral | 08.23.07
Jim - this is no different from Bubble 1.0 where sites attempted to "get big fast" and then monetize later.
We're still recovering from that hangover (which is why, according to Delloite + Touche - see my Jaffe Juice post), consumers prefer magazine ads to online ads.
Sorry, but this is Dumb with a capital "D".
I'm not against monetization, nor even using advertising...but this overlay is no better (in fact, it's worse) than what I was involved in, when I was at TBWA\Chiat\Day in 2001.
Posted by: Joseph Jaffe | 08.23.07
Actually Joseph,
If you read the number crunching on this, this launch has absolutely nothing to do with making money for Gootube. The projections are thin. Here's a link.
http://www.alleyinsider.com/2007/08/mary-meekers-yo.html
This isn't about monetization for Google. This is about a promise to their advertisers that they have the biggest/widest reach possible, more than anyone on earth, and they do.
This is, in a way, about being first.
That's not dumb, that's how you keep your stock high and your brand higher.
Dumb would be letting one of 100 other competitors steal their advertising partners if they didn't do this.
Posted by: Jim Kukral | 08.23.07
"This is, in a way, about being first."
You are right, Jim. And you are wrong. Google has forgotten that products are created for the consumer, not the advertiser. Maybe you have too...although it seems you often like to take the contrarian approach on principle.
Eventually people will start moving away from YouTube to the next alternative. I'm not going to lose any sleep over it, I'm simply going to wait for the eventual alternative.
Posted by: Jay Ehret | 08.23.07
"Google has forgotten that products are created for the consumer, not the advertiser. Maybe you have too."
What product are you referring to? You mean the user generated customer created product?
Because what Google is providing is the service, not the product.
"Eventually people will start moving away from YouTube to the next alternative."
People have been saying that about Google for years now. Remember Teoma???? lol
Posted by: Jim Kukral | 08.23.07
Google and others are claiming that these overlay ads are not intrusive. Of course they are intrusive. If you are watching a video and you see an ad it is intrusive - as good advertising should be. Let's cut the charade and admit that it is intrusive. Nobody would watch an ad if it wasn't.
Check out the Ad-Supported Music Central blog:
http://ad-supported-music.blogspot.com/
Posted by: Marc Cohen | 08.23.07
You're a real thinker man! You know I came up with that idea a long time ago but now I call it Blip'd! If anyone was listening, I could blow you're mind.
Posted by: Ty Graham | 08.23.07
Surprising how many people here are comfortable with the idea of advertising on YouTube. The idea of sharing video does however become uncool when you have the impression someone is crashing the party. It's like having a threesome and your accountant decides to jump in bed too.
Google isn't so dumb as to let their reputation slide down the toilet if this makes too many waves regardless of the click rates. We'll see.
Posted by: Tim | 08.24.07
@Tim - nice analogy
I'm not sure we aren't overestimating Google...to their credit they are risk-inclined and rabid experimenters/innovators, but they've certainly made plenty of gaffs in the past (remember their book venture?)
I'm not sure how much of this is Google versus YouTube.
What does interest me though is the classic challenge of focus. For the longest time, MSN could not shake the hangover of being perceived and acting like a TECHNOLOGY company. Yahoo! was able to pull ahead b/c it was - if nothing else - a media company through and through.
The same applies with Google. They're trying to run with the Madison Avenue big dogs now and they don't have the experience, expertise or finesse to do so...so much so, that they are playing right into the wrong hands.
It will be interesting to see how long (or short) this lasts...
Posted by: Joseph Jaffe | 08.24.07
Joseph -
I am surprised that you take such a simplex approach to the YouTube ads.
As far as I'm concerned, this is but one move in a big game of chess for Google.
You're looking at the obvious, immediate result, and I think that's flawed.
If I was a betting man, I'd wager this move is setting up a more significant move.
Posted by: Shawn Collins | 08.25.07
"They're trying to run with the Madison Avenue big dogs now and they don't have the experience, expertise or finesse to do so...so much so, that they are playing right into the wrong hands."
But they do have a chunk of change to play with and 75% of the planet is using their search engine which I figure is enough to ensure some leeway for a couple of screw ups.
Experience and expertise can be bought and I wouldn't announce the end of Google just yet.
Posted by: Tim | 08.25.07
I think Shawn said it best. It's a setup, for sure.
Posted by: Jim Kukral | 08.25.07
As a producer of TV commercials I think that if your going to spam online video the best approach is to improve the creative of post roll ads (as Joseph said). 2% is just banner ad performance and bet that rate will get even worse.
Online video advertising in conjunction with online entertainment is intrusive and menacing.
There is a video advertising market that is about to explode and it seems that Google is failing to address it. it's Local Video Advertising for the local directory market. There are 26 million SMBs in this country. Most will ue locally produced video ads for this. This is the LOGICAL online video advertising market. Most people can't get past YouTube-esque video to see this.
Posted by: Simon | 08.27.07
A really interesting post!
Google has built its incredible success upon delivering its audeinces with what they want. Primarily, that's been highly accurate search results. For some time Google has monetized this through ads, however these ads have been relavant to the user - added value to the searching experience on the whole.
I hope that this step is implemented well (I'm sure Google will do a great job of it) but the decision to interfere with the user experience and claim that 'only 10%' of users being turned off is a selling point is worrying one.
Posted by: John | 08.30.07