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.
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 videos 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…