YouTube’s new ad product makes the case for vertical video

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YouTube on Sept. 12 launched vertical video ads, a format already offered by Facebook, Instagram, Spotify and, of course, Snapchat. Marketers said they expect YouTube’s to be used differently from Instagram’s and Snapchat’s, though.

Since the ads appear as pre-roll before a YouTube video, they’re similar to the TV-like ads already on YouTube rather than those on Snapchat and Instagram that encourage people to swipe up.

“People just don’t use YouTube in the same way. When I’m on Instagram, my fingers are flying. On YouTube, you’re more holding the phone and watching,” said Mark Douglas, CEO of ad tech company SteelHouse.

Snapchat pioneered the format back in 2014, first with NBCUniversal on a trailer for the film “Ouija.” In 2015, Snap CEO Evan Spiegel flew to Cannes to convince skeptical advertisers that vertical ads were better in the mobile era. Now, the ads are on all the major tech platforms and advertiser interest is growing as people spend more time watching vertical videos, commonly called Stories thanks to Snapchat.

“Stories are taking the place of television in some cases with users spending time watching an extended autoplay of stories from brands and influencers,” said Rigel Cable, associate director of data analytics at creative agency Fluid. “Story ads present a great opportunity for advertising spots and based on the off-the-cuff style of stories, authentic and lower production content may perform best.”

YouTube seems to be pitching its ads as an easy-to-create complement to its standard ads product.

“Vertical video ads provide a big, beautiful canvas to deliver your message on mobile and allow engagement with your customers in a way that fits their viewing preferences. We recommend adding both vertical and horizontal video assets to the same campaign for maximum Brand Lift impact,” Google wrote in its announcement.

Ahead of YouTube’s official launch of the product, Hyundai tested it with ads for a new SUV model, Kona. YouTube said Hyundai received a 33 percent lift in brand awareness and about a 12 percent lift in consideration compared to people who didn’t see the ad.

YouTube is already an important part of Hyundai’s budget with one in two car buyers using YouTube for information prior to purchase and 96 percent of viewers watching a video of the brand they ended up purchasing, said Dean Evans, CMO of Hyundai Motor America. The new vertical ad format lets Hyundai customize its pre-roll content to match the video format, Evans said.

But getting advertisers to think about vertical ads, YouTube could indirectly benefit Snapchat and Instagram by creating more inventory. Then, it could become a price war, where, so far, Snapchat’s and Facebook’s vertical video ads are seen as cheap, marketers said.

“Given that YouTube was one of the original video social media platforms, and arguably the most significant still, their adoption shows the rise and significance of this new format,” said Jennifer Grygiel, assistant professor of communications at Syracuse University’s Newhouse School.

But it remains to be seen if brands will simply chop up existing creative made for horizontal ads, build vertical video ads just for YouTube or reuse ads made other platforms.

“What is still unclear is, was this product change a patch or a major innovation? Innovation at Snap pushed them to adopt vertical video, but will YouTube simply follow or will they lead?” Grygiel said.

Ads within Instagram Stories can be up to 15 seconds in length, while Snapchat ads are up to 10 seconds. YouTube’s vertical video ads can run either as six-second ads or as far longer (YouTube recommends a maximum of three minutes). SteelHouse’s Douglas said he thinks the product will encourage more brands to think about shorter ads, though, since that’s the requirement on Instagram and Snapchat and arguably more suited for mobile viewing.

“The ads on Instagram and Snapchat are short. I think [shorter] could be better for YouTube. I think it all could result in new advertisers for them,” Douglas said.

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