YouTube begins showing twice as many ‘pre-roll’ ads

More ads: YouTube is going to start showing back to back video ads in a single pod.

Change in YouTube video ad load:
1) Spots per pod — ↑ 100%
2) # of breaks — ↓ 40%

This will result in an increased ad load of ≈ 20% on YouTube.

Quote from Jim Nail — Principal Analyst @ Forrester:“Why is online trying to replicate the TV model that we all believe is chasing consumers away from TV…This makes no sense.”

Fewer ads: NBCUniversal plans to roll its shorter ad pods into more of their primetime programming this fall.

Key findings from NBCUniversal on the impact of reduced ad load:
1) Ad Likability — ↑ 38%
2) Likelihood to search for brand — ↑ 39%

Flashback: Fewer, More Relevant Ads

Quick math:
1) Assuming $20 CPM for 30s ads
2)$0.04 per minute of advertising
3) $1.81 equals the value of 1m focus from customer
4) The break-even for an advertiser would be 1 out of every 91 ads holding the customer’s attention.

Our take: Ad loads on TV are probably high while digital (especially CTV/OTT) are low. Expect these to move in opposite directions over the short term.

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