The New York Times has a feature today discussing a new advertising service from YouTube called First Watch. The program is designed to give advertisers a chance to reach customers with a pre-roll video message on users' first video view of the day, and it's already being tested by the likes of Macy's, Tommy Hilfiger, Hotels.com, and Virgin Mobile.
Advertisers have long been able to purchase ad space atop the home page of the video giant. For instance yesterday's home page ad is for the upcoming Dreamworks film, Kung Fu Panda 2. It looks like this:
Now, YouTube says that these home page ads are performing very well–so well, in fact, that they're selling out regularly. The outstanding performance has YouTube engineers looking for ways to extend the same kind of engagement for other advertisers, which led directly to the creation of First Watch. After all, there are millions of users who end up on a YouTube page through a method other than the home page entry point.
If the home page ad reaches viewers who come to the YouTube home page first, then First Watch will capture the users who come into YouTube in other ways than the home page–clicking on another website's direct link to a video player page, direct type-ins, etc. First Watch will show a pre-roll ad to viewers who enter the site outside of the home page, showing them an ad on their "first watch" of the day, but then not again after that initial view.
First Watch won't show ads on all of YouTube's videos, though, but only on the videos created by official YouTube partners. By limiting it to partners, it keeps the scope of First Watch to a minimum. The New York Times says that the YouTube home page ads serve 150 million impressions per day, while the First Watch program is only serving 15 million, or roughly 10%.
Pre-roll ads used to be fairly disliked by viewers, but YouTube says that this is changing, as advertisers create better ads and YouTube gets better about matching ads with specific demographics. While they certainly have analytics data at their disposal that I have no knowledge of, I'm skeptical that these First Watch pre-roll ads will have the same level of impact as the home page ads. But again… with First Watch having been in testing for some time now, it's entirely likely that YouTube knows something about its users' behavior that I don't.