YouTube Shoots Google In Foot
YouTube pre-roll ads are driving users to install adblocking software, which in turn is having devastating effects on independent publishers. Google, who last year earned 97% of their revenue from online advertising (over $32 billion) has a product that drives people to block ads. Crazy, right? While Google may be able to reduce the impact of adblocking, many smaller publishers shut down or set up premium subscriptions to make up for lost ad revenue.
But according to AdBlock users, traditional advertising is not the problem- it’s intrusive advertising that they can’t stand. More-so, they’re fed up with pre-roll YouTube ads, especially when the video they’re trying to watch isn’t much longer than the ad itself. In a recent lively discussion on Reddit, these pre-roll ads were cited as the most frequent motivation for installing adblock. One Reddit user commented:
Yep, Youtube is what killed it for me too. I didn’t mind when I could skip after 5 seconds but now we get stuck watching the full thing.”
Unfortunately the ad-tech industry is so large that brands and publishers don’t always know exactly where their ads are coming from or where they will end up. Sometimes YouTube ads can be poorly targeted or poorly placed, resulting in one ad appearing before yet another ad, such as movie or game trailers. Other times, the misplacement can cause a great deal of controversy or backlash towards a brand. Last month Nissan, among other companies, unknowingly had their pre-roll ads run before a violent video of a woman being beheaded in Mexico. Despite these mishaps, video ads are on the rise, and so are adblock installs.
Not to mention when you go to see a movie or game trailer (which is an ad), and before you can watch your ad, you have to watch a different ad. Why the **** do I have to watch an ad in order to watch an ad?”
Users become annoyed with intrusive YouTube pre-roll ads, so they look for a solution. They install adblock to solve this problem and Youtube ads disappear. Unfortunately the adblocking plugin doesn’t distinguish pre-roll ads from less intrusive advertising, which has drastic repercussions on independent publishers. As revealed in our recent report, this collateral damage has started to take a devastating toll on publishers, especially in the tech and gaming industries.
Who Wants Pre-roll Ads Anyway?
Even with the negativity, some publishers and content producers still manage to make a living of off YouTube ads, if they can attract a significant number of views. According to an article released this past summer, the top 1,000 YouTube channels average $23,000 in monthly ad revenue. The notorious “Gangnam Style” video, now the most popular YouTube video of all time, has made over $870,000 in ad revenue alone.
The ripple effects for brands are also beneficial. Each minute of video uploaded by one of these top channels generates 350 social media interactions
(through acts like “shares” and “tweets”) further spreading their message and increasing brand recognition.
One study revealed that pre-roll ads are 2.5x more effective than traditional banner ads. On top of that, video ads on mobile are also quite successful. According to a report from TubeMogul, click through rates for pre-roll ads on mobile are 4.9% on average compared to just 0.6% on PCs. MDG also projects an increase in digital video ad spending from 2 billion dollars in 2011 to 8.04 billion in 2016. The success of pre-roll ads doesn’t give Google much incentive to slow down, while they continue to make controversial moves regarding adblocking.
Google shoots itself in the foot as YouTube’s pre-roll ads drive people to block ads everywhere Tweet
Mixed Messages From Google
A rather emotionally charged Google ad has been making its way around the internet lately, heavily advocating the power of Google search. Ironically, all of the searches displayed in the ad fail to show Google ads that would typically come up in a normal, adblock-free search, suggesting that Google prefers to show a cleaner page in the commercial. They’ve also allegedly been asking users to disable adblock for some of their sites, while paying AdBlock Plus to whitelist their other Adwords ads, saving an estimated $887 million last year.
So what’s the solution? We’ve said it before: better ads. Bad advertising is making it harder for small publishers to operate for free, while opening up opportunities for internet giants such as Google to pay off adblockers while simultaneously increasing intrusive advertising.
My rule of thumb is “My mouse is over the skip button. You have five seconds to get my attention. Go.”
Have something to say about the matter? We’d like to hear more from publishers, advertisers, and adblockers alike. If you’d like to share your story with us, feel free to contact us here or on Twitter.