A little bird just whispered this in my ear, soon after said bird got off the phone with Google’s political advertising team: rates for Google/YouTube’s “in-stream” ads in certain states have doubled or tripled in recent weeks, and it’s because of the glut of political television advertising right before the mid-terms. But the trend isn’t so much driven by political advertisers themselves buying in-stream ads, which run before YouTube videos and hence are difficult for viewers to skip. According to this source, the primary driver is the fact that political ads have eaten up so much broadcast and cable television inventory that businesses are running out of places to hawk their wares. Consequently, THEY’RE cranking up their online video advertising buys, using in-stream ads to reach potential customers viewing videos online instead of over the airwaves.
Now of course, plenty of political advertisers are running YouTube ads, including the source of the story above, so companies aren’t the only ones eating up the video ad inventory and causing rates to rise. But the primary political effect seems to be indirect, in that it’s the campaigns’ (and outside groups’) television spending that’s driving other advertisers to less-crowded outlets. In the process, they’ve pushed in-stream ad rates from a typical $8/thousand impressions ($8 CPM) to something closer to $20 or $25 in active political areas. Next up: once advertisers get a taste of the effectiveness of advertising over YouTube, will they stick with it? Google’s got to be happy about this one.