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YouTube: You Want (Google's) Ads With That?

By - January 29, 2007

Youtube

One of the more news-making moments of last week’s Davos event, at least as it relates to our little corner of the world, was Chad Hurley’s revelation (BBC) that it would soon be rolling out a system to share revenues with the folks who create its videos (Jarvis has the video). For me, this was sort of a “no shit, Sherlock” moment, I mean, did anyone really expect Google was going to buy YouTube and *not* make ads available inside the core product – the videos themselves?

But the way it was spun really struck me as impressive. Instead of “YouTube to Run Ads,” the headlines were “YouTube to Share Revenue With Creators.” Well played, my man!

I spoke to Chad briefly at Davos, and I am certain he and the folks at Google are deeply studying the best models to roll out ads on the site. My guess is there will be any number of units available (one might be just three seconds long, he told the BBC), and when folks upload their videos, they’ll be presented with a choice of the kind of ads they might want to roll into their video, and also, various placement options (ie, before, after, middle, above (?) etc). There will probably also be some kind of passive AdSense play a la Revvr, and for sure, the more aggressive units will also be some kind of AdSense video mashup, as the company hinted at in this recent post on Google’s blog:

Google will support YouTube by providing access to search and monetization platforms and, when/where YouTube launches internationally, to international resources. YouTube co-founders Chad Hurley and Steve Chen and the rest of the YouTube team will continue to innovate exciting new ways for people to “broadcast themselves.”

Earlier this week, we announced one example of innovation in monetization and distribution with a new AdSense video test. We’ll be working with a wide set of content providers, grouping together high quality video content from providers with high quality ads and offering them as playlists which publishers can select from and display on their AdSense sites.

This was not a simple non-sequitor, even if it reads like one (the “innovation” references are not parallel). Google is working hard to figure out how to apply the rules of AdSense – write (algorithms) once, read many (dollars) – to video. There’s a massive audience out there, and there’s a lot of money to be made “sharing revenues” with it.

Eepybird

Ultimately that audience will determine, through its attention to videos, whether YouTube succeeds or fails at this new ad gambit. After all, producers of high quality video have plenty of options when it comes to hosting content these days, it’s cheap, and it’s easy. No one has to post content to YouTube, unless of course they want the distribution engine it has become (sound familiar? You don’t have to be spidered by Google, either, but who are we kidding here?)

The real question I have is whether, over time, YouTube will require that folks run some kind of advertising in order to gain access to its massive distribution engine. If you want to use YouTube to establish your brand, the way, say, the Coke and Mentos or Ninja guys did, will Google require that you cut them in for using the YouTube platform to do that? Will it ban other kinds of ads, ads competitive to its new units, that creators have inserted into their uploaded videos? What about Dove Evovideos which are, in essence, entirely ads, like the Dove Evolution phenomenon? The Dove folks LOVED that success story, but YouTube didn’t make a dime on it( and the agency folks who made the ad aren’t quite sure how they’ll get paid as well – they usually make money on the media buys, after all). As for denying competitive ads, the precedent is certainly there – AdSense bans competing ad platforms.

Huh. Innaresting. Worth some more thinking, when I’m not jet lagged and posting at 3 AM on a Monday morning. Till then, g’night…

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10 thoughts on “YouTube: You Want (Google's) Ads With That?

  1. ///Ultimately that audience will determine, through its attention to videos, whether YouTube succeeds or fails at this new ad gambit.

    YouTube could optionally add the Video Ad directly in front of the uploaded video’s beginning like most news services are now doing.

    If a Video becomes popular enough,more people will wait

  2. www.unet.co.uk says:

    utube is just a big fish in an everygrowning market.
    soon to be an average fish in a big sea

  3. Jim Greer says:

    So many more questions than answers – what’s the rev share percentage? Who verifies copyright ownership?

    We’re following a similar model for user-uploaded games at Kongregate. And dealing with the same issues. In our case the rev share will be between 25% and 50%, depending on exclusivity and degree of integration with our site. As for copyright verification, the volume of games is so much lower than that of videos that we’ve got a much easier task.

  4. Oracep says:

    With a Coning score of 82%, this is a very strong post, John. You should do more jetlagged writing.
    80-100 = low level background/high level analysis and judgement.

  5. gzino says:

    “If you want to use YouTube to establish your brand…will Google require that you cut them in for using the YouTube platform to do that?”
    Very interesting thought. I don’t know about “require”, but how about “highly motivate”? And agree the spin was very impressive – mainly lost was the fact that it is now big media that are becoming the dominant “creators” that will be “sharing revenues”, rather than the user generated content creators. Finally, let’s hope that they customize, individualize, and match the content and ads much better than traditional media or Google does it today – more on the last element over at:
    http://blog.nextblitz.com

  6. pstabler says:

    As you say, not a surprise though rather a fiendishly well crafted “explanation”.

    One correction: it’s highly unlikely creators of Dove piece went unpaid. The media commission form of payment for creative folks is almost entirely dead.

    They’re paid for their time.

  7. Steve Tateossian says:

    uh… they may want to look into a patent already filed by a company called Revver, that helps content providers monetize on PPC basis within their videos by ads tagged to them. But who knows maybe Google will just acquire them as well. Revver also verified copyright ownership on everything and doesn’t allow a user to upload anything they don’t in fact own. I smell lawsuits coming… ahh… the good ole U.S. & A ;)

  8. Bruce says:

    John – Excellent post…so you are an “AM Writer”. Given that “a picture is (likely) worth a thousand words” – and that there are 30 of them per sec. in a video clip – I for one am anxious to see what sort of search technology Google is planning to use in place of key-words to sort and ID the video (i.e. theme, color, image, length, underscore, etc.) beyond the titles that are presented by the respective producer. Key word based search will only scratch the search parameters available in a video image let along a video clip. Also, as stated in one of the other comments “sharing rev.” with potential video clip providers is going to require some rights clearing for ownership. Stay tuned…no pun.

  9. jr says:

    Honestly, with the revenue share possibility, I wonder what sort of dupe detection and resolution they’ll have in place. It’s almost as if we’d be overrun by a sea of ebaumsworld wannabes as folks rush to post “original” content to get some of that rev share. Granted, a side issue might be that new content folks will have to publish to google/youtube as well just to ensure that nobody else gets credit for their work.

  10. manish b says:

    yes, like you pointed out john, these are logical next steps for google & youtube. this is also a sandbox where the current telivision networks and cable networks play ( besides doing content creation ). difference is google/youtube only does distribution/monetization, no content creation of its own.

    so my question is, what would be the logical next steps for the ABCs and NBCs of the world ? as we can all see, increasingly, media is consumed over the internet.