Google is launching a new "incentivisation programme" where it will pay advertising agencies commission on video advertising as it tries to bolster ad revenues from its video properties, including YouTube.
So why does it need to incentivise agencies?
There are two key issues.
The first is the need to push the online video format, more generally as part of Google’s rather large entry into the display advertising market.
The second issue is the fact that YouTube has yet to make a profit or meet earnings expectations. So presumably the thinking is that “YouTube is about video – consumers expect to see video content here – we need to boost income - so let’s push video advertising via YouTube”.
Video advertising will become the de facto standard on the web – but the active debate is which online ad formats will work (pre-roll, post-roll, interstitial etc). One of the key stumbling blocks to date has been that online video advertising has been positioned in such was as to really pose a barrier to the online consumer experience....do I really want to wait 90 seconds watching a pre-rolled ad BEFORE I get to the content I originally came to see? And what do I think about the brand that puts that barrier in my way?
However what could really drive take up of on-line video ads is that YouTube has just announced a deal with MGM studios to offer full-length movies on the site (building on the deal with Lionsgate films earlier in the year offering short media clips). By effectively giving away content content with a high perceived value, perhaps Google belives that consumers will overcome any potential barriers/resistance to online video ads.
Ironically, it’s Google itself that is leading a joint-research project into how online users consumer online video. One would imagine that the results of this alongside an incentivisation programme would be most effective.
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