So, Will You Skip YouTube Ads?

YouTube today officially rolled out the ability to skip through pre-roll ads on its videos now, begging the question, who will actually watch ads anymore? The feature is called TrueView, first reported last week in AdAge, and lets viewers skip over an ad after five seconds of it playing—if they choose to.

YouTube created the feature, which it has been beta testing for the past month, not for its users but somewhat ironically for its advertising partners. The advertisers only pay if the user opts to watch the whole ad instead of skipping over it, which should, as the theory goes, give a more targeted self-selected audience to the advertiser.

“Some advertisers had initial gut reaction of, ‘Wait, you’re gonna let users skip my ad?'” said Google’s senior product manager Phil Farhi in the AdAge piece. “But the thing that tips them over from that gut reaction is you’re not paying for those skipped ads, and it’s a system that allows you to reach that opted-in engaged audience at scale.”

Hulu has tried a version of this to some success with its Ad Selector, which it released as early as 2007. Only about 10% of Hulu ads are included in this, but some major players like Starcom MediaVest Group like the consumer-selection that the Ad Selector (ASq) format offers.

Despite meetings with YouTube to try to get them to adopt the format, it looks like for now YouTube is going its own route with TrueView. And given that YouTube users watched one ad every 66 minutes (170 million ads at a frequency of 4.1 ads per viewer) in October, there’s still a lot of room to increase here.

Either way, major advertisers are looking to get better targeting efficiency with their pre-roll ad spots, which make up an increasing part of the $1.3 billion online video ad market this year. And if skipping ads makes for a cleaner ‘net audience’ for adveristers—at a lower cost—then it may be the answer. Instead of cost-per-click, the cost-per-view might be the new currency of online video ads.

With television, there was a long-standing social contract in place between the viewer and the network, essentially saying that viewers would get entertaining content in exchange for watching a modest amount of ads. But as soon as TiVo DVR came onto scene about a decade ago, viewers were able to skip those pricey 30-second ad spots, thus breaking the social contract that supported that content. If given the choice to skip or not to skip, YouTube may have a chance at a new social contract with its ever growing audience.