It's not so often we get to talk about AdWords here at ReelSEO, but I keep a keen eye on their blog because tidbits of fascinatingly shiny news pop up now and again....oooh shiny! Anyway, I just saw a post from yesterday that said they are switching up the way the bidding on Promoted Videos work on YouTube. Formerly they were cost-per-click (CPC) much like AdWords search. Well now they're changing all that. Here's why that's good news.

According to the blog, on May 25th Promoted Videos will change to cost-per-view (CPV). So that weights the cost toward people actually seeing the video. Previously, it was CPC so when a user clicked on the Promoted Video you were charged, but they didn't necessarily see the video. Now the user must click and then initiate viewing of the video.

That sounds much better for you as video advertisers because a click didn't necessarily mean there was a video view initiated and now the cost is shifted toward the value of a viewer actually starting and watching the video. This is definitely a good thing for Promoted Videos if you ask me.

Here's what Baljeet Singh, Senior Product Manager, YouTube had to say about the new system

How Bids Work

When you create your Promoted Video ad, you'll be asked to set a maximum CPV, which is the maximum amount you're willing to pay for a video view. Promoted Videos use the AdWords discounter to automatically reduce your costs. As always, we'll only charge you one cent more than the next advertiser on the page competing for the same or similar keywords/placements, ensuring auction-driven efficiencies.

What You'll See

As before, Promoted Video campaigns can be set up and managed right in AdWords or via As of May 25th, billing terms from all Promoted Videos campaigns will officially convert from CPC to CPV and will be reflected in your advertising dashboards in both systems. If you're using AdWords to purchase Promoted Videos on YouTube, you may continue to see mentions of CPCs in your campaign dashboard as we introduce additional CPV formats and adjust verbiage in the system.
Please visit the Help Center for more details and FAQs. Our hope is that this change in the pricing model aligns Promoted Videos more closely with your goals, driving the right results for your business.

The Take Away

This is a major change if you think about it. Formerly Promoted Videos were treated just like search ads. However, there's a major difference. A search ad, when clicked on, generally leads the user right to more information about your product or brand. A Promoted Video would take them to the page with the video, but they wouldn't really get engaged with the product or brand. So you were probably not seeing a very good conversion ratio or completion rates for your campaigns.

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Now, since the user has to initiate a viewing of the video, they will be more engaged. You've got them into a click stream where they clicked to get to the page, clicked to start the video... perhaps they'll click for more information (if you've got a good call-to-action) or click on another video or click on a buy now link, etc.

It's that old social psychology principle, if you startYouTube Promoted Video Advertising Program Move to Cost Per View (CPV) chris car salesman them off saying yes (clicking) it will be easier to get them to say yes later (clicking more). Car salesmen use this trick a lot... can I get you something to drink? Would you like to have a seat? Can I get you into a hugely overpriced, gas-guzzling car that you don't really need because your current car actually is just fine but you think you might need a new status symbol?

If you answered yes, then I might have to switch jobs... Kung Pao I'm out!

  • ukvierl

    Yup very truly said Mr. Rick I feel also that they should remove the option of auto play so that when any user click on that they should get a option to choose whether the want to watch that or not so that they did not have to watch those videos which they don't watch................

  • Colin

    Hi Christopher, Not sure if you closed this post or not as I didnt hear anything back and I did check the check box that says: Notify me of follow-up comments via e-mail. Thanks,

  • Colin

    Hi Christopher, I am incorporating sponsor ads that will play directly from the video itself (not using an ad server). Although I havent started selling then yet, I want to get an idea of what anyone pays when a 15 second ad that is viewed such as a non-skippable commercial on youtube. Our ads will play in front of the video home tour but I have no idea what to charge the advertiser and need a frame of reference. I know that there is a huge swing in the variable of whether the adds are hitting a target audience vs. one that is not but still have no idea what the dollars are. I can tell you this, that our advertiser is getting around 90% target audience as they are real estate videos being viewed by buyers and sellers on Real estate websites. The advertisers (that we want to sell to) would be mortgage companies, title companies anything to do with homes. I cant find anyone talking about pricing anywhere on the internet. Do you have any idea what so ever> Thanks, Colin

  • Ronnie Bincer

    I don't get it... In the past (even checked just now 5-20-2011) when I clicked on a promoted video (shown at the top of YouTube's right sidebar - some times tagged as "promoted video" or "featured video") it took me to the video and it started playing automatically. That means I am "watching" the video after a click on the ad.

    You mention in this article that with the old (still active today) cpc model, you were presented with a video, but you may not have watched it. Are we talking about when the Video Ad is presented outside of YouTube? Otherwise what I see inside YouTube shows/plays me a video when I click on the ad.

    • Christophor Rick

      Maybe it's more of just a question of when you get charged. But I would imagine they need to turn off autoplay to get that going then because they won't have any other way to know if a viewers views it. If not then it's just a silly marketing ploy on their part right?

      Heh, I'm in the States now, I forget that I can actually check on this stuff! :) I'll ask them about it. I asked a bunch of other questions. Maybe we'll get a follow up piece out of it for you Hound :)