YouTube to Test Ad-Skipping Option


Google could employ elements of its successful search-ad formula as it adjusts its approach to making money on YouTube.

The Web giant is inching toward an engagement model for in-stream video spots that uses viewer feedback to determine pricing and whether the ads are shown.

YouTube is expected to announce today an experiment that would give viewers of a select number of videos the opportunity to forward through pre-roll spots.

Google is opting-in advertisers running video campaigns via AdWords for the test. It will display a small text option in the right-hand corner of the viewer, reading, "Skip this ad." Clicking that text takes users directly to the videos they wish to play. YouTube is running the experiment on clips produced as part of its partner program with creators who have elected to include in-stream ads.

On its face, this seems like a harebrained notion. After all, it would stand to reason that most users would immediately hit the forward button.Google sees an opportunity, however, to collect valuable user data that could contribute to the development of a quality-score system similar to the one it uses to determine the placement and pricing of search ads. The company is already testing user-choice pre-rolls to gain information on ad popularity.

"The longterm vision is more of a pay-for-performance model," said Phil Farhi, product manager at YouTube.

The idea, according to Farhi, is that advertisers could come to Google with a video, a target-audience number and a maximum price it would pay for each view.

Google would crunch data based on user habits and the ad's performance to determine how to reach the advertiser's target. Rates would be higher for ads likely to be skipped compared to ads users' elect to watch frequently.

Such an approach would mirror Google's search ad system, which determines placement on results pages based on the amount an advertiser pays for clicks combined with a quality score that's heavily influenced by those click rates.

"We're looking for the signals that indicate whether someone is going to skip an ad," said Farhi. "We'll use that as the equivalent of a click-through rate."

That system also resembles experiments being made in engagement-based pricing by ad networks Videoegg and Meebo, as well as social news venue Digg. (See also: "Thinking Beyond the Online Banner.")

YouTube already has a variation on this model with its "promoted videos" option that displays related clips on YouTube searches. Advertisers pay only when users elect to play those ad videos. Google also runs click-to-play videos in banner space across its ad network.

YouTube is already collecting data on in-stream ad performance. It has found, unsurprisingly, that users are far more likely to abandon videos when pre-roll ads run 30 seconds as opposed to 15 seconds. The surprising finding, Farhi said, is how much more likely: double.

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