YouTube ads bring ughs

But others praise new strategy

NEW YORK -- YouTube's new video-advertising strategy has provoked a mixed reaction from the blogosphere and the site's community.

The semi-transparent "overlay" ads, unveiled Tuesday, fill the lower fifth of the screen, last for 10 seconds and can be clicked off at any time. If clicked on, it will take the viewer to a larger ad like a movie trailer. They are similar to the TV ads in which a personality or a graphic suddenly will appear moving across the bottom of the screen during a show, usually to promote another network offering.

Initially, only select professional content partners including Warner Music Group will use the ads and they will share in the revenue with Google Inc.'s YouTube. A Google spokesman stressed that the company is not working toward a goal of monetizing all of the videos on the site.

Despite Google's attempt to present advertising in the most unobtrusive way, many users reacted with concern on YouTube's official blog post.

"I'm unsubscribing from anyone who has ads in their videos, and if everyone has ads, then I'll just find a site that doesn't," one post read.

Others, however, praised the strategy and wrote that as long as the content owners and the viewers had a choice about the ads it wouldn't mean the end of the site. Some also realized that YouTube, bought last year by Google for $1.65 billion, is a company that needs to make money, and this might be the best option available.

"YouTube and Google need to get some ROI or else all of this goes away," a Wednesday morning commenter wrote. "Let me say thanks to you, Goog, for the work, dedication and the imagination that viral video can make the world a better place."

Google is confident that overlay is its best option on YouTube. The company found that 50%-70% of viewers tested would turn off a video if there was a preroll, and the amount of users clicking on overlay ads was five to 10 times greater than the rate for banners.

The spokesman, however, did not have the number for the percentage of testers that clicked on the overlay ads. He also said that he did not have a sense of what percentage of users were turned off by overlay and closed the video once that type of ad started.

Brent Weinstein, CEO of Web video company 60Frames Entertainment, said he is excited about the overlay ads and sees it as a positive that Google is trying a new approach. He said that it could be some time before the online video company knows the true impact of the technology.

"Ultimately, the consumers will decide and they're going to have to see it beyond the first day and the first few weeks," Weinstein said. "In many cases, the reaction is negative before they have a chance to truly digest the experience."

Google this week also announced another change in its online video strategy, offering a full refund to anyone who had purchased videos through Google Checkout.

The company recently shut down the service in which consumers paid to rent or own videos through Google, which will render the content no longer playable as of February. Google originally only offered credit for other Checkout services, like coffee or magazines, but the company said Monday on its official blog that it would offer a full refund.