Google will begin serving advertisements on selected YouTube videos through an “overlay” method that appears on the bottom of videos during the first 20 seconds of play before disappearing 10 seconds after.
YouTube users will have the option to close the ad overlay before it finishes playing or click on the ads to launch it. If the user decides to click on the ads, the current video will pause for awhile, while the user views the ads and resumes it as soon as the ad stops from rolling.
Serving ads on YouTube videos could be both beneficial to YouTube users and advertisers as well. Giving users more control of the ads being serve to them reduces the annoyance towards online ads and even entices them to click on the ads. Hence, the challenge lies on advertisers to come up with engaging and lively advertisement that would lure customers into their fold.
Currently on the testing stage, the new ad serving scheme pays YouTube content partners around 70%-80% revenue payment. As for advertiser charges, YouTube charges $20 per one thousand video viewings.
With the current popularity of user generated and uploaded videos, it is high time that Google utilizes YouTube videos for income generating purposes, to recover the cost it pays for it.