Google will today unveil a new advertising model for YouTube which it claims is five to 10 times more effective than other advertising formats currently carried on the video sharing site.
YouTube will introduce semi-transparent animated "overlays", which appear across the bottom fifth of the video window a few seconds after each clip begins and can be clicked on to show the full advertisement.
The US internet search company is hoping the new format will help address investors' concerns about YouTube's business model. Since spending $1.65 billion buying the video site in October 2006, Google has been under pressure to explain how it would make a return on the investment amid fears its 100 million users would reject attempts to commercialise the site.
"We have tried a lot of formats [ and this is] the most interesting and the most respectful of the user community," said Eileen Naughton, Google's director of media platforms.
A test of various formats with 200 advertisers and content partners, such as Warner Music, BMW and 20th Century Fox, had shown that viewers were five to 10 times more likely to click through to the advertisement than with any of its other standard formats such as banner ads, she said.
After the overlay appears, about 15 seconds into a clip, a viewer can choose to close it, wait for it to expire automatically, or click on it to launch an "in-video" advertisement, which plays while the original video clip is paused.
In trials, fewer than 10 per cent closed the overlay, Ms Naughton said, while 75 per cent of those who clicked through watched the entire advertisement.
Despite the rapid development of the internet advertising market, which PwC estimates will grow from $31.6 billion to $73.1 billion between 2006 and 2011, marketers have expressed concern at signs that many users of popular websites were put off by current formats such as "pre-roll" ads shown before video clips.
The new format, which allows users to rate or comment on the advertisements they see, will be restricted at first to the "partner" sections of YouTube's site, which are sponsored by advertisers or professional content providers.
