Google brings video ad auctions to YouTube in UK

Promoted Videos serves thumbnail video ads against search results on YouTube, with advertisers bidding on keywords in an auction model.

It’s the latest in a series of moves by Google to create sustainable advertising formats on YouTube, but the first to place YouTube video ad results next to the site’s search results. Promoted Video results will replace the current text-based Sponsored Links results which are served through AdSense, although Google may continue to serve text links where there aren’t enough video ads in auctions.

Google is looking to capitalise on the huge expansion of the online video market, which grew 195% year on year, according to the latest IAB/PricewaterhouseCoopers figures (nma 1 October 2009).

The move coincides with the imminent launch of official long-form content on YouTube, with Google understood to have agreed deals with partners including ITV and Channel 4 (nma 21 May 2009) signifying a major ramp-up of the video-sharing site’s services.

Promoted Video ads are bought on a cost-per-click (CPC) basis, with advertisers able to serve a free call-to-action overlay on Promoted Videos that are clicked on. They can also bid against rival trademark terms.

Third parties, such as affiliates, can enter official branded videos into the auction if they have a prior agreement with the brand.

Suveer Kothari, UK head of YouTube sales, said, “This is an opportunity for those that have videos to promote them. It’s available for everyone, from the biggest advertiser to the smallest user.”

The launch has been welcomed by advertisers keen to see YouTube become a key platform for generating revenues from their video content.

Tom Jefferies, Bacardi’s global digital marketing manager, said, “As our spirit brands produce more branded content in video formats, in addition to our conventional advertising, so YouTube is an increasingly important destination for us. This is something we’d definitely consider as part of our digital arsenal.

“In terms of payment models, if we assume a view follows a click, then using a CPC charging model seems appropriate,” he added.

Ben Rhodes, MasterCard’s VP of marketing for the UK and Ireland, said, “Commercially it’s a sensible step, with the caveat that this is done sensitively so that consumers and non-corporate content generators don’t migrate to other video-sharing sites, thereby fragmenting the media landscape even more.”

However, Rhodes questioned the use of CPC as an appropriate ad model. “In terms of commercialisation metrics, I would prefer to move to a reach and frequency-based model as opposed to CPC, because video really is broadcast,” he said.

Andy Wasef, emerging platforms director at digital media agency Mediaedge:cia, said, “I think we’d all prefer to see a payment model that was based on actual views or engagement, rather than just clicks, because we’re all aware that a click doesn’t necessarily equate to a view. Drop-off before the video plays may well be relatively high.”

But YouTube’s Kothari said the call-to-action overlays, coupled with the recently launched YouTube Insights product, which provides advertisers with audience demographic data, will give them a clearer understanding of the impact of videos.

“The overlay sits on top of the video, showing up after about ten seconds and linking to wherever you want it to,” he said. “So advertisers will know not exactly how many people watched their video but also how many clicked back to their site and interact.”

Kothari added that Promotional Videos is one of a number of key advertising opportunities for Google as it looks to grow revenues generated from YouTube.

“First we have home-page formats, engaging people on arrival. The next thing they do is search for content,” he said. “Promotional Videos puts quality advertising in front of people when they’re doing that.”

He added, “Finally, it’s about advertising when people are watching the videos. This might be pre-roll or in-video advertising and we’re hard at work developing appropriate formats.”

This story first appeared on newmediaage.co.uk