From an email sent by Google PR to me today:
Today website content is much more than just text – it’s also video. As the importance of online video increases, we think it’s important to deliver users relevant video ads, give advertisers a new way to reach customers online and help publishers earn additional revenue from their video content. Starting today we will begin an in-stream video ads test with a small group of US publishers and advertisers to help us learn the easiest and most scalable way to deliver ads to online video content.
Publishers will now be able to insert high quality, relevant in-stream ads that enhance their video content while maintaining a positive user experience. It also provides broader distribution for participating publishers, and an effective way for advertisers to reach their target customers with rich, engaging messaging. This test represents our continued efforts to address the challenges faced by publishers who want to monetize their video content, by advertisers who want access to quality video inventory, and finally by users who want ads to enhance their video watching experience, not detract from it.
The details:
The test will run on participating sites throughout the network.
As with current AdSense publishers, revenue will be split between the website publisher and Google. The exact revenue share is not being disclosed.
The advertisements will play on the publishers’ Flash players, not on YouTube or Google Video hosted videos.
Publishers can select which videos to monetize and track their performance using AdSense. They can also choose where the ads will appear within the videos.
Ad creatives, which can be no longer than 30 seconds, can be made skippable for users.
Hey, mb: Are you there? It is time for part deux of our conversation from a few weeks ago. Remember the one in which Eric Schmidt rolled his eyes in response to a MS accusation of a Google advertising monopoly? Eric’s contention was that Google’s market was “all of advertising”, and not just Adword and Adsense advertising. I then proceeded to roll my eyes back at him, because I simply don’t believe it. Well, if you, mb, or anyone else is interested, I’d like to continue that discussion now. In particular, Google PR says:
Publishers will now be able to insert high quality, relevant in-stream ads that enhance their video content while maintaining a positive user experience. It also provides broader distribution for participating publishers, and an effective way for advertisers to reach their target customers with rich, engaging messaging.
So to begin with, like I said, Google is not into “all of advertising”, but into only “relevance-based” advertising. This is one of their fundamental cores. However, with that requirement, the whole video advertising marketplace begins IMO to look very small for them. Why? Let’s think about it in terms of long-tail dynamics. You have a long tail of web pages (all kinds of content under the sun), and a long tail of advertisers (all kinds of small business owners, etc).
When the ads are Adsense, you can match all kinds of ads and pages, because the tails are long enough to reach each other.
Now with video, however, you have a problem. The video ad suppliers do not behave in a long tail manner. Video ads take visual creativity, specialized hardware (or at least a budget to hire someone with the hardware) and can typically cost a great deal to create. That means that there is only a short head on the distribution of video advertisers: Cars, fast food, (medical) drugs, etc. And because there is only a short head of available video ad content, that short head can only RELEVANTLY be placed on a very small number of web pages: web pages that talk about cars, fast food, or medical drugs.
Oh, sure, Google can go ahead and place those video ads anywhere, if they really want. But then it would not be RELEVANT. And that goes against everything Google stands for, and everything the PR person just wrote above.
So if you think about it, Google’s portion of the market for video ads is actually relatively tiny. Google can really only display a limited (short head) amount of ad content on a limited (short head) amount of web pages. As we know from Chris Anderson, the bulk or mass of content (the majority of the market) is in the aggregation of the long tail, not the short head. But video ads, by their difficulty and expense of creation, make this long tail aggregation impossible.
In other words, if Google is really going to stick by its principles and limit itself to relevance-based advertising only, the market is not, as Eric Schmidt said, “all of advertising”. It really is more like Microsoft said.. quite limited. Even given the current inventory of video ads, the number of pages on which those ads will be relevant, and thus the size of Google’s market share, is tiny. I stand by my eye roll.
However, one of the things I enjoy about John’s blog here is that we can discuss these things. Anyone care to show why I am wrong? Is there something I’m missing, here?
I think Google is aware of the mismatch you describe, JG, because advertisers participating in the video ads test have access to a “video ad creation marketplace” managed by Google. Not sure of the details of how it works, if there’s a cost to the advertiser, how much it’s being used, or the quality of the ads produced, etc., but the upshot is that Google hooks advertisers up with people (third parties) to create a video ad for them (the advertisers obviously provide all necessary info). So Google is providing a way for advertisers in more “tail-ish” verticals/industries to get their content into video ads as well, at least eventually.
ElsieR: That’s good to know. I still have doubts about how far down the video tail smaller advertisers will feasibly be able to go, even with outside help. Creating text ads with two lines of copy will forever remain easier, I think. But at least it’s a start.
Yet keep in mind that this is only half of the mismatch. The other half is, for the “big” (short head) advertisers, how well does their subject matter mesh with the short head of web content? The massive television ad market consists (like I mentioned above) of things like car commercials and sleeping pill commercials and fast food commercials, right? So the question is, how often is the average web surfer visiting pages about cars, sleeping pills, or fast food, pages on which Google can actually do its relevance targetting?
Yes, someone who is in the market for a car might go on a brief spurt of car-related pages. And there is a small segment of full-time car hobbyists as well. But the vast majority of web surfers probably do not visit car-related web pages all day long (much less sleeping pill web pages or fast food web pages). So when/where/how are all those car advertising dollars going to be spent, in Google’s “all of advertising” market? How are the current advertising departments of the car companies going to reach the same number of people that they currently do during, say, a hour episode of “Lost”? I seems to me that if you’re talking about relevance-based advertising, car companies will no longer be able to reach as many people as they do now, to build brand awareness, because most people are not looking at cars most of the time. By the time an individual does go on the market for a car, it might be too late to show that individual a “relevant” car ad, because it will be too late to create brand familiarity.
Thus a significant number of advertising dollars will probably, of necessity, need to remain in the “non-relevance” based advertising market, a place that Google has self-selected itself out of, by its very own principles.
So I still see a fundamental, maybe even non-bridgeable gap between Google’s approach of “relevance-based advertising” and Schmidt’s claim of “all of advertising” as Google’s entire marketplace.