YouTube InVideo Overlays - 1st Stab At Monetizing Viral Video

In a significant first, YouTube has decided to let advertisers inject their messages inside the video frame for select content on its site (see ClickZ or MediaPost), or
NYTimes. For an example of the approach, see this Smosh video and watch Homer Simpson at 15 seconds in.

...sorta like TV networks do already.

Some key points about the ads — lifted directly from the ClickZ article:

The new offering, dubbed InVideo Ads, mimics the clickable ad overlays introduced in recent months on ad networks like VideoEgg and YuMe.

Ad product consists of animated bars that obscure the bottom 20 percent of the video frame for a given clip. They initiate 15 seconds after the beginning of a clip

InVideo overlays are “80 percent transparent” and remain visible for approximately 10 seconds before shrinking to a small button users can later click to view the marketing message again.

YouTube has set a $20 CPM for InVideo ad buys consisting of an InVideo ad accompanied by a tiny in-player companion ad and an adjacent in-page unit.

Clicking on an overlay ad pauses the current video and launches one of two experiences brands can choose between. One is a new clip superimposed over the video in progress via a player-within-a-player interface. When the paid clip ends or is closed, the original automatically picks up where it left off. Shiva Rajaraman, YouTube Product Manager, said 76 percent of those who click the overlay and watch the video ad viewed the entire trailer for NewLine’s “Hairspray.”

During YouTube’s research process, Rajaraman said, “One of the key things we found, not surprisingly, is that when a video is playing on YouTube their attention is [locked in to the video frame]. When we came up with an ad format, we realized that… it needs to be in the player.”

Yet when the Google-owned video portal tested pre-roll placements, YouTube users abandoned video clips at a more than 50 percent rate. The overlay, by contrast, results in an abandonment rate under 10 percent. Not only that, but click rates are five to 10 times greater than standard display click-to-video ads, according to Rajaraman.

via Nalts and Clickz and MediaPost and NYTimes.