A very long time ago Google was trying to find alternatives to pre-roll to monetize YouTube videos. Google-sponsored consumer research in 2007 found that users don’t like pre-roll. But that’s ancient history.
Today Google is trying to find more ways to generate and capture display and video ad revenue, which it views as a massive growth opportunity for the company. And YouTube is in the center of that opportunity.
According to the NY Times, Google is testing a new program for pre-roll on YouTube called “First Watch.”
[A]n advertiser can buy a preroll spot on most people’s first view of a YouTube video each day . . . The commercials on the youtube.com home page have been “highly successful,” Baljeet Singh, senior product manager for video monetization at YouTube . . . They have been so successful, he added, that they are “starting to sell out.”
Users see an ad — the same ad — the first time they watch (non-UGC) video on YouTube and not thereafter. The Times quotes Google product manager Baljeet Singh, who says that the tests of First Watch have “performed really well” (CTR of 1 percent apparently).
The program offers advertisers reach that far exceeds anything they can buy on traditional television. YouTube is by far the largest online video property. However it lags in terms of ad impressions. Hulu generates the greatest number of ad impressions of all online video sites.
On a related note video ad serving platform FreeWheel found that 80 percent of mobile video streams were on Apple devices in Q1.
Source: FreeWheel Q1 2011