
Google will begin
testing "skippable" pre-roll ads in videos on YouTube Wednesday that could lead the Mountain View, Calif. search engine toward a new advertising model. The small sampling, which runs indefinitely,
will allow people who find the videos to click on the link and skip the ad, which takes them directly to the content. The ads will run on videos from content partners, which have already opted into
the test.
The goal to move the industry toward more engaging high-quality ads requires a lesson in human behavior. The test that determines if and when people watch the video clips will
provide Google with insight into the type of person who may skip an ad, what type of ad they might skip, and what piece of content does better than another. Google also will look at whether some ads
are skipped in a specific portion of the session. Does the person skip the ad in the first video versus the third during a 30-minute time slot while on YouTube?
The research also examines the
correlation between television and video ads. The results could lead Google toward a different type of advertising model other than pre-rolls, overlays, and traditional display ads. The model is cost
per engagement, where advertisers would only pay for opt-in engaged views of the ads. "We're already down that road with promoted videos," says Phil Farhi, product manager at Google's YouTube. "We see
the ability to skip ads as another form of engagement."
Farhi says Google eventually sees a model where the advertiser only pays for a completed view of the ad. Quality and user signals would
determine the correct place in the video to serve up the ad.
Google often questions theories, but rarely provides a glimpse into the thinking behind the tests. In fact, research based on
pre-roll ads in videos has been ongoing since 2007. A high abandonment rate by people watching the ads in clips made it difficult to find a model that worked. So, pre-roll ads in videos took a
backseat for a bit to some of the other projects. Since then, a more effective model emerged that initially found its way to long- and short-form videos.
When Google first tested in-stream ads
in 2007, it learned that abandonment rates -- especially for pre-rolls -- were as high as 70%, and users were far more likely to watch and engage with overlays. It turns out that pre-roll ads in
short-form video content work.
Pre-rolls in short-form videos, defined as less than between 15 and 20 minutes, can keep the attention of people watching the clip. The test will also run on
long-form videos. But when a pre-roll ad runs 15 seconds, YouTube registers completion rates as high as 85%.
Creativity and quality also matter. Google's research suggests that a high-quality
advertisement can influence someone into sticking around to finish viewing the ad three times more than if that same person watched the ad on television.
"On television you might need 30 seconds
to make sure people know the Web site and phone number, and tell them the offer three times," Farhi says. "Online, you can run a much shorter industry ad, and use the companion ad space for the call
to action."