How YouTube can increase ad engagement and earn more revenue with a simple change
12 Saturday Oct 2013
A few days back I saw this tweet on my feed and that got me thinking
Hey Youtube, place an ad in the ‘Skip Ad’ rectangle which shows the timer, coz that’s where I am staring at.
— Gabbar singh (@GabbbarSingh) October 1, 2013
While this is mean to be a joke, on reflecting on it and talking to friends, this has a lot of truth ! By having the option to skip an ad, YouTube has inculcated a habit in the consumers of completely focusing on the ‘Skip Ad’ button and ignoring the ad that is being shown for the 5 seconds. Even to the extent that I don’t even remember any brand or any ad that I have seen on YouTube in the recent past (leave a comment if you have the same habit while watching YouTube ads)
Officially the YouTube ‘Skip-through rate’ as per the article below is 70%, I suspect it might be much more. Also because not all those who haven’t skipped the ad, might have wanted to watch the ad (they might have forgotten or their attention may have been doing something else, etc). The percent of audience truly engaging with a YouTube ad would be very low.
YouTube does have an option for the advertiser to show non-skippable ads that run anywhere up to 30 seconds. However, the consumer habit to skip ads transcends to even non-skippable ads and they are still looking for the Skip Ad button for 1-2 seconds and don’t want to shift focus to trying to see the full ad at that point after not finding that button. This makes even the non-skippable ads engagement level very low. This is personal as well as anecdotal, but I am guessing applies to others too.
Advertising on YouTube and on other video sites is here to stay. Even Facebook is contemplating to introduce video ads. Needless to say these companies will have to find the right video ad formats that are less obtrusive, more engaging and serve the advertisers, content providers, consumers and the platform itself well.
With this as context, here is a suggestion to YouTube to achieve these objectives. YouTube should stop the option of skipping ads all together and rather allows only 5 second teaser/partial ad, with a button to “Show full ad” that appears after the 5 seconds alongside the video the user wanted to watch. The user can then choose anytime during or after watching his video to see the ad if it interests them. A sample screenshot of the “Show full ad” button is below
Everyone benefits from this
- The consumer doesn’t have to wait for clicking the Skip Ad button and that itself will increase satisfaction. The 5 second teaser/partial ad now becomes much more engaging as the attention is now not focused on clicking the Skip Ad button
- The advertisers will have more engagement for the ads with all users. Further more, if someone clicks ‘Show Full Ad’, it indicates a far higher level of engagement than someone not clicking the ‘Skip Ad’ button and will be willing to pay more for such action
- YouTube and the content providers have a higher revenue opportunity as there is more value in terms of Cost per view that they can get for the 5 second teaser as well as the click on the ‘Show Full Ad’ button
Overall, the hypothesis is that there is more value created in the system, as determined by the total revenue that YouTube and the content providers earn or what the advertisers are willing to pay.
This would obviously have to be A/B tested and over a set of users over some period to prove with any certainty. Other considerations might have to be kept in mind as advertisers may have to create special 5 second versions of ads for YouYube or be prepared to show partial 5 second ads. But for an industry trying to figuring out the right format of ads, this is meant to be a thought starter. Let me know your comments.