Not every development in Google’s advertising repertoire entails a huge leap forward with AI. A case in point is YouTube expanding its First Position ad offering. This allows advertisers to secure the first in-stream ad viewers see when they start watching YouTube content. This ad placement is designed to maximize visibility and engagement by capturing audience attention at the beginning of their viewing session, a moment when users are typically most engaged. This is the kind of refinement Google needs to make given YouTube’s importance: for Q3 2024, YouTube generated $8.92 billion in ad revenue, marking a 12% year-over-year (YoY) increase from Q3 2023.
So, what does its First Position mean to advertisers?
How YouTube Has Updated First Position
Initially, First Position ads were limited to YouTube Select inventory, which consists of premium content from top creators and channels. However, with this recent expansion, these ads are now available across all YouTube content through Google’s Display & Video 360 platform. This broader reach allows advertisers to target a wider audience across various types of content, not just premium selections.
Previously, First Position ads were sold at a fixed CPM (cost per thousand impressions) rate. With the expansion, YouTube has shifted to a dynamic CPM pricing model, providing more flexibility for advertisers to adjust their spending based on demand. This change allows advertisers to potentially lower costs during periods of less competition while still securing prime ad placements.
First Position ads can now be used in both in-stream and YouTube Shorts formats, which increases the potential reach of these ads. However, it’s important to note that while these ads are guaranteed to be the first in-stream ad during regular YouTube sessions, they are not guaranteed to appear as the first ad on YouTube TV.
Advertisers can use the Instant Reserve feature in Display & Video 360 to book First Position inventory without negotiation. This feature streamlines the process, allowing for immediate reservations and quotes.
Benefits for Advertisers
- Maximized visibility: By appearing as the first ad viewers see when starting a session, brands can significantly boost awareness and recall during key moments like product launches or cultural events.
- Increased engagement: Google says that Booking.com saw a 21% lift in ad recall using First Position ads during a holiday campaign. And, IHG Hotels & Resorts achieved double the brand awareness benchmark by combining First Position ads with other YouTube sponsorships.
- Flexible budgeting: the dynamic pricing model allows advertisers to adapt their spending based on market conditions and demand. This flexibility can help manage costs while still securing high-impact placements.
Potential Challenges
- Increased Competition: now that First Position ads are available across all YouTube content, competition for these premium placements is expected to rise. This could drive up costs for advertisers looking to secure these prime spots during high-demand periods.
- Strategic use required: given the potential increase in competition and costs, advertisers will need to be more selective about when and how they use First Position ads. Careful planning will be essential to maximize ROI.
What Advertisers Should Do
Based on YouTube’s recent expansion of its First Position ad offering, we have some recommendations for advertisers using this feature:
Strategically Time First Position Ads
First Position ads can significantly impact brand recall and engagement, especially during moments when consumers are most likely to pay attention, such as major cultural events, holidays, or product launches. Advertisers should plan to utilize this placement during high-impact periods that align with their key marketing goals to capture the highest audience engagement.
Apply Dynamic CPM for Cost Management
With the shift to dynamic CPM, advertisers gain flexibility in spending. To optimize costs, brands should monitor periods of lower competition, which may allow them to secure First Position placements at reduced rates. Tracking seasonal ad demand patterns can provide insights into the best times for cost-effective yet high-visibility campaigns.
Optimize Cross-Format Reach with YouTube Shorts
The inclusion of First Position ads in both in-stream and YouTube Shorts formats offers the opportunity to reach different audience segments. Brands targeting younger, mobile-focused audiences should consider prioritizing Shorts placements. Crafting ad creatives that are concise and visually engaging will help capture viewer attention in these short-form videos.
Use Instant Reserve for High-Impact Campaigns
The Instant Reserve feature streamlines the booking process for First Position ads, enabling advertisers to secure placements without negotiation. For time-sensitive campaigns, such as limited-edition product launches or flash sales, using Instant Reserve can ensure immediate access to prime placements, maximizing visibility without delays.
Monitor Competition and Adjust Ad Strategy Accordingly
Since First Position ads are now available across all YouTube content, competition for this premium placement is likely to increase. Advertisers should monitor competitor activity and, if costs escalate during high-demand periods, consider shifting budget to less competitive times or exploring complementary ad formats within YouTube.
Measure Brand Impact Beyond CPM
With the expanded reach of First Position ads, advertisers should measure the broader brand impact by tracking metrics like ad recall, brand lift, and engagement metrics. For instance, Booking.com’s experience with a 21% lift in ad recall demonstrates the potential for increased awareness. Monitoring these metrics can help assess ROI beyond CPM, offering insights into campaign effectiveness and informing future strategy.
By following these strategies, you can maximize the potential of YouTube’s First Position ads to enhance brand visibility and engagement across YouTube’s audience.
True Interactive Can Help
The expansion of YouTube’s First Position ads offers advertisers an enhanced opportunity to capture audience attention at critical moments across all types of YouTube content. With dynamic pricing and broader availability, this feature is particularly useful for high-impact campaigns such as product launches or major cultural events. However, brands must be prepared for increased competition and should strategically plan their use of this format to ensure cost-effectiveness and maximum impact.
True Interactive can help you maximize the value of First Position ads. Learn more about our capabilities on our website.
