Google's YouTube site is piloting a new ad format called First Watch in which advertisers can get a preroll spot on a consumer's first view of a video. The service launched this alternative position - it already offers in-stream ads and overlay banners - because demand for ad space was growing, Baljeet Singh, senior product manager for video monetization at YouTube told the New York Times' blog Media Decoder.

This format will also apply to professional content - not the user-generated video clips that are so ubiquitous on the site. Tommy Hilfiger, Hotels.com, the Lifetime cable channel, Macy’s and Virgin Mobile have already tested it, Media Decoder also said.

Top Ranked

It is not surprising that Google is finding available ad space scarce on YouTube: the site ranked as the top online video content property in April with 142.7 million unique viewers, according to comScore VideoMetrix data. But it does have to keep an eye on, Hulu, which generated about 1.1 billion video ad impressions in April, accounting for about 29% of the 3.8 billion video ad impressions viewed in total by US web users during the month. Hulu also led in total ad minutes (470) and average ads per viewer (45).

What makes Hulu's video ad impression totals even more impressive is that the site only reaches 8.4% of the US population, placing it sixth among the top 10 generators of video ad impressions.

Not that YouTube isn't maximizing its reach. According to Citi analyst Mark Maheney, YouTube’s gross revenues hit $825 million in 2010, and will reach $1.3 billion in 2011 and $1.7 billion in 2012, (via Tech Crunch). Also, he noted, 81% of YouTube's Top 100 videos show ads, compared to about 60% a year ago.

Original Content

Google, like Hulu, is also stepping up its presence by building out original content for this channel. The company is investing a reported $100 million in YouTube to do this.