The company is seeking further feedback on the video advertising service as a rising number of YouTube users threaten to leave the site if the advertising feature is not improved.
Only videos from content creators that have signed up for the advertising scheme, called InVideo, will host ads, leaving the majority of videos on YouTube free of the overlays, a Google spokesman said Friday. Advertisers will still be able to reach a large audience through YouTube videos even if the company only places ads in a small portion of videos.
"And our users are not shy about telling us what they like and what they don't, so it behooves us to be careful," said Shashi Seth, YouTube Group Product Manager, in an e-mailed statement.
The company launched the InVideo ads on Wednesday. They start as an overlay on the bottom 20 percent of a video and people can click to watch the advertisement, or if not, the ad will simply disappear. Clicking on the overlay pauses the video, which resumes after the ad finishes.
So far, responses to the new advertising system, posted on YouTube's blog, have been negative. People are passionate about the issue, with many threats to leave YouTube for other sites, such as Myspace.com or Break.com
"As a viewer of videos I don't want to see any of the content of the video covered up. I only had one video posted myself, which I have just removed. Bye!," writes user KPDover, in a comment.
As of early Friday, the total number of comments had reached 669, with many repeats, but still a substantial increase to the 132 comments posted Thursday at around the same time.
YouTube hopes it can change people's minds about InVideo ads, and sees them as a way to generate revenue for the site without being too intrusive.
They are designed to interfere as little as possible with viewing and be relevant to the video. Warner Media, part of Time Warner Inc., is one company that has signed up to allow overlays to be used on its music videos, and some of the ads are for other Warner music.
Still, YouTube users complain that 20 percent is a huge amount of space on the small video screens, enough to detract from the viewing experience.
YouTube plans to continue on with the InVideo overlays, and hopes "to make the ads an important part of the advertising model for online video," said Aaron Zamost, from Google corporate communications.
The InVideo ads users are seeing on YouTube videos are the result of two months of testing. The company tried other methods of video advertising, including pre-roll video, but the in-video ads simply worked better. Videos that started with pre-roll advertisements were shut down 70 percent of the time, according to Google, while only 10 percent of in-video ads were abandoned.
In addition, the number of people clicking to play an InVideo ad were 5 percent to 10 percent greater than the number of people clicking on a standard banner ad, the company says.
The company uses software to match ads to videos, and can pinpoint an audience closely. For example, an advertiser could place an InVideo ad targeting 18-24 year old soccer fans in Los Angeles, to be played between 6pm to 11pm local time. The ads are placed by genre, demographic, time of day and geographic location.
The technology behind YouTube's InVideo was all developed in house, but Zamost points out, the company never said it invented overlay technology. It did not.
Time will tell if YouTube figures out a way to ensure its community grows accustomed to InVideo advertisements. Early on, YouTube rivals may have an opportunity to scoop up disaffected users. There are plenty of alternative video sharing Web sites on the Internet.
But whether YouTube users like it or not, the company is committed to moving forward with InVideo ads.