Good Morning Silicon Valley

What a conundrum. You’ve got Google, which does not want any part of evil, and you’ve got Google’s YouTube needing advertising, which is a necessary evil. What to do, what to do? Well, the folks at Google have been chewing on this ever since the company shelled out $1.65 billion for the video sharing site last fall, and they finally settled on a lesser-evil answer. Under the headline “You Drive the YouTube Experience,” as if this were the answer to a popular request, YouTube said late Tuesday that it’s adding in-video ads to the videos of select partners. Instead of running before, after or in the middle of videos, the ads will show up in a translucent bar that appears 15 seconds into the video and covers the bottom 20 percent of the screen. If you click on it, your video pauses and the commercial rolls. When the ad ends, or when you end it, the video resumes. You can click on the bar to close it, or if you ignore it entirely, it disappears after 10 seconds.

Google and YouTube are talking up the elements of viewer options and content relevancy. “What we have come up with is a user-controlled ad format that is engaging,” said Eileen Naughton, Google’s director for media platforms. “We want our users to be able to accept and choose what type of advertising they engage in.” And while there does seem to a resigned acceptance of the inevitability of ads on YouTube, not everyone is thrilled with having it pitched to them like a new feature. “What? Viewer-friendly?” writes Nick Carr. “Is it viewer-friendly because it’s arguably less annoying than having an ad run in advance of a video? That’s like saying that being hit on the head once with a hammer is a pleasant experience because it’s not as bad as being hit on the head twice with a hammer.”

Thing is, early returns on the ad format look like it’s working. Naughton said, and advertisers confirm, that from five to 10 times as many people are checking out the in-video ads compared with the number who view regular display ads — banners or boxes on Web pages. And that would be good news for Google, currently saddled with meeting the infrastructure demands of YouTube (streaming 1.9 billion minutes of video a month) without seeing commensurate revenue. If it has indeed found the sweet spot between evil and not quite as evil, that could start to turn around.