Written by Chris Albrecht
Posted Wednesday, July 9, 2008 at 8:28 AM PT

 

YouTube Reversing Stand Against Pre-Rolls

In an exhaustive story on Google’s troubles monetizing YouTube, The Wall Street Journal discovered that the company is considering a plan to implement the dreaded pre- and post-roll advertisements, something the company has shunned since the beginning.

It’s a major reversal for the company. Last year, when we talked to then-head of YouTube monetization Shashi Seth he said:

“Pre-rolls and post-rolls did not perform well on our platform. [In our testing,] 75 percent of our users were unhappy with them.”

Seth quit earlier this year; perhaps it was a sign of protest over the impending switch to the hated ad format?

Whatever the reason, the company is under the gun to generate significant revenue and the WSJ reports that money from YouTube ads will most likely hit just $200 million this year (looks like Forbes was right). At a recent talk, Chad Hurley said YouTube is also looking to affiliate sales for revenue. But advertisers like the pre-roll format, and in a crunch time like this, the company will go with what works.

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Comments & Trackbacks

  1. Youtube monetization is a total mess.

    Pierre Col - UbicMedia on July 9th, 2008 at 9:10 am - Permalink

  2. A Marketing Sherpa report said that 70% of people abandoned pre roll ads. Youtube backs up those numbers. So why in the world would you move forward with preroll? Anyone can answer that?

    Jim Kukral on July 9th, 2008 at 9:24 am - Permalink

  3. @Jim Where were the ads? I’d abandon a two minute news clip because of a 30-second pre-roll, but would probably have no problem sitting through a 7-second ad in front of a two minute clip produced by The Onion.

    Ben Homer on July 9th, 2008 at 10:10 am - Permalink

  4. “75% of our viewers weren’t happy with them”… but 100% of our advertisers were.

    Sam on July 9th, 2008 at 10:16 am - Permalink

  5. [...] Pre-Rolls? Think Inside the Box Commenters were quick to condemn YouTube’s plan to add pre-rolls to its videos. With so many people hating on pre-rolls, why [...]

    YouTube Pre-Rolls? Think Inside the Box « NewTeeVee on July 9th, 2008 at 11:08 am - Permalink

  6. [...] shocking to hear that YouTube would consider something as counter to its philosophy as showing pre-roll ads, which the company itself has acknowledged that its users despise. But I guess that’s what [...]

    Just 4% of YouTube Videos Come From Partners « NewTeeVee on July 9th, 2008 at 2:47 pm - Permalink

  7. There’s a couple reasons Google would be willing to include pre- or post rolls. One is they’re trying to gravitate more to people viewing videos on the TV platform, which has socialized people for decades to put up with commercials.

    The second reason, although Google would never admit it, is they’re probably tired of the freeloaders using the site without offering anything back.

    If there isn’t a significant way to monetize the site, pressure will eventually come from shareholders to do it or get rid of the property. U.S. law requires a public company to make decisions based on what’s best for the shareholders, and executives must respond accordingly.

    Assuming they aren’t able to figure out a way to do it, pressure similar to what’s being put on Time Warner concerning AOL is inevitable; especially if the Google stock ends up dropping in another big way.

    As far as the users of YouTube go, putting up pre-rolls would get rid of a lot of the dead weight that sits around always wanting something for nothing.

    That may even be part of the Google strategy in order to cut back on costs.

    One way or the other, Google will have to monetize the site. They’ll just have to be willing to lose some viewers in exchange for that reality.

    Even if they do, it makes no difference. What other online business wants people to add to their costs without a way to make money on them? Eventually the users that leave would come back, because competitors would make a similar move in order to offset costs. It’s called running a business.

    Gary Bourgeault on July 9th, 2008 at 3:11 pm - Permalink

  8. [...] it isn’t surprising that NewTeeVee is reporting a stance reversal by YouTube on the idea of running pre-roll advertisements on YouTube videos. But when a pre-roll [...]

    Are Pre-rolls Evil? on July 10th, 2008 at 1:00 am - Permalink

  9. [...] borne out (at least in the present day) by the actions of video sites; for instance, YouTube considering resorting to pre-roll and post-roll advertising to eke more revenue out of its partner videos. The [...]

    Report: User-Gen to Only Ever Account for 4% of Video Revenue « NewTeeVee on July 10th, 2008 at 5:22 pm - Permalink

  10. [...] be able to see pre-rolls and overlays. This lends credence to our earlier theory that YouTube is reversing its stand on the hated pre-roll format because as it moves to the TV set, the pre-roll will look just like a [...]

    Exclusive: Video of YouTube on TiVo « NewTeeVee on July 16th, 2008 at 10:45 pm - Permalink

  11. [...] at a time when it’ll try just about anything to make a buck. It’s mulling over a reversal of its stand on pre-rolls and co-founder Chad Hurley has said that affiliate sales will be a big [...]

    Will Ben Ling Be Money for YouTube? « NewTeeVee on August 14th, 2008 at 4:57 pm - Permalink

  12. thanks for the news

    hot hatches on September 25th, 2008 at 7:37 am - Permalink

  13. [...] had long said pre-roll ads were too intrusive for its audience, but over the last year it has started indicating it might be open to new [...]

    YouTube Gets CBS Shows, Pre-Rolls « NewTeeVee on October 10th, 2008 at 12:05 pm - Permalink

  14. [...] But YouTube’s actions as of late feel sort of like John McCain’s campaign in the waning days of the election. The company is under the gun to make money and, knowing it’s behind the eight ball, is throwing everything and anything it can at the problem. Heck, the company even flip-flopped on pre-roll ads. [...]

    How Hulu is Like Obama « NewTeeVee on November 17th, 2008 at 8:17 am - Permalink

  15. [...] our acquisitions of dMarc Broadcasting (Audio Ads) and YouTube,” was the official wording. Multiple estimates from outsiders pegged the 2008 number at around $200 [...]

    YouTube to Bring In $500M This Year? « NewTeeVee on March 16th, 2009 at 11:01 pm - Permalink

  16. [...] analyst Youssef Squali recently said he thought YouTube would bring in $500 million this year, and multiple estimates have put YouTube’s 2008 revenue near $200 million. While Amel’s numbers may be smaller, [...]

    Analyst: Hulu to Bring in $120 million in ‘09 on March 31st, 2009 at 12:39 pm - Permalink

  17. [...] : http://www.businessweek.com/technology/content/mar2009/tc20090330_571175.htm?campaign_id=rss_tech http://newteevee.com/2008/07/09/youtube-reversing-stand-against-pre-rolls/ [...]

    Hulu joue des coudes avec YouTube en termes de revenus | Plinkers on April 7th, 2009 at 2:27 am - Permalink

  18. [...] is not without precedent on YouTube. The video-sharing site indicated last year that it would be softening its hard-line stance against the format, and even included pre-rolls in front of CBS content last [...]

    Dispute Keeps Boyle Clip From Bringing in Big Bucks on April 23rd, 2009 at 7:36 am - Permalink

  19. [...] YouTube Reversing Stand Against Pre Rolls Posted by root 1 hour 59 minutes ago (http://newteevee.com) It mulling over a reversal of its stand on pre rolls and co founder dispute keeps boyle clip from bringing in big bucks on april 23rd 2009 at 7 36 am permalink if your comment doesn 39 t show up immediately it may have gotten caught marketing consulting b Discuss  |  Bury |  News | YouTube Reversing Stand Against Pre Rolls [...]

    YouTube Reversing Stand Against Pre Rolls | Wood TV Stand on May 31st, 2009 at 4:13 pm - Permalink

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