Youtube video ads - Where Google is going wrong

Yesterday, Google announced that they shall now be placing ads inside the Youtube videos. Here are a few significant points with regard to this announcement:

Ads appear semi-transparent on the videos from about the 15th second to the 25th second
Advertisers need to pay $20 for every 1000 impressions
The ads shall be non-intrusive and can be closed by the user at any instant
The user can also choose to open the ads on a new window

This announcement was on the cards for a long time, especially after Google announced in early February that they shall be sharing their revenues with the users. And also according to their own research on around 200 videos, this seems to be the most “preferred” form of advertising since the number of users who click on the ads was more than ten times the normal Click-through-rates of normal text based ads on websites.

Why this interpretation could go wrong
I have serious doubts about the results actually implying that users are ten times more interested on these ads than the context-based ads on websites. Let’s face it that none of us are really “interested” in ads. Any average report on website ads-optimization will tell you that clicks increase when people actually come to your website ‘looking’ for something. That is they assume your site as an interface site for them to get to their ‘destination’. But, in the case of YouTube, where users are normally there simply to watch videos and enjoy. That is to imply that Youtube is regarded a ‘destination site’ in itself.

Why then are the ads getting more hits? I can reason out two points. One, ads on Youtube are now a new thing. And more so ever during the testing period in June and July. New things do arouse curiosity and this is probably one reason why they invited more hits. The other reason could be that users could simply be looking to close the ads to watch the video in peace. Unlike the conventional Google ads that remain whether you wish or not, in this case, Google deliberately provides you an option of closing an ad that you do not want. And this can just increase the number of times an ad was clicked ‘by mistake’.

An Alternative?
Google is unlikely to change their ad format anytime soon, since it does need time to see the efficacy. Also, given that the number of clicks are going to be higher, the advertisers may also be under the impression of their ads doing well here. But, what is the best ad format for a video? Google’s tests on preroll ads - ones that are displayed full screen before the video is shown, show that 70 percent of the users actually stop watching the video in such a case. So, that clearly cannot be an option. However, I think marquee ads at the bottom of the video can be a nice option. It is a preferred form for rolling out news on TV, and users are already accustomed to such a format. That will also give the advertisers independence to decide how to show their ad - whether show their ad one time per video thousand times or show it twice per video 500 times.

Having said that, this is an interesting move and is surely going to shoot up the Google shares much more at the stock market. For Google, it looks like there is no sky at the top..