If this isn’t the biggest news item of August 22nd, it should be. I’m referring of course, to Google / YouTube introducing in video ads, which is covered in detail by Jordan McCallum (who does a good job), and the New York Times.
The gist of it is this: Google / YouTube has fastidiously avoided in-video advertising since its purchase. Probably because they were trying to figure out the best way of monetizing the site. Which is a good thing (monetizing that is), as YouTube serves up billions of minutes of video per month, all waiting to be monetized in a way that serves the video uploader / producer, as well as the advertiser, and of course Google.
The reason why its a “big deal”? Not because other sites haven’t already done in video advertising. Look to sites like VideoEgg for things like that. No, the reason why its a big deal is because YouTube is sitting on an absolute gold mine of material that people are spending minutes — nay, hours — watching every day, week, or month.
Google announcing its monetizing YouTube in a creative non-obtrusive fashion is like Google announcing that its monetizing its search with its Adwords technology.
There’s no question that there’s going to be a slow roll-out, almost certainly slower than with Adwords, because they’re limiting exactly where the ads go and who can advertise. But, from what I understand about how these will work — in the bottom half of the video, only starting 10-20 seconds into the video, which can be switched off any time, and put on a frequency such that users aren’t ’saturated’ with in-video ads — I’m encouraged to hear how this actually works out for advertisers and Google.
Because if the conversion rates *do* pan out the way the initial stories make it seem like, then wow — this isn’t say, bigger than Jesus, but its another huge milestone in Google’s monetization of its assets and one that no Google-watcher should over look. It might not transform the way online video is being delivered, but it has the potential to transform Google’s bottom line into something even more impressive than it already is.
August 22nd, 2007 at 1:20 am | Permalink
[…] Yes, Google / YouTube Introducing In Video Ads Is A “Big Deal” » This article link is from an article posted at Deep Jive Interests on Wednesday, August 22, 2007 […]
August 22nd, 2007 at 11:10 am | Permalink
[…] the looks of this first attempt at monetizing YouTube, I think Google will be successful - and as Tony Hung notes, possibly insanely successful. The frictionless money-making machine trundles […]
August 24th, 2007 at 3:55 pm | Permalink
Tony -
Don’t neglect to remember the $1.65 billion capital expenditure Google incurred to acquire YouTube. I imagine a LOT of advertisement units must be sold on the site to break even on that investment. I seriously wonder the amount of time in years it will take to reach the break-even point?
- Brandon M.
August 24th, 2007 at 3:59 pm | Permalink
http://valleywag.com/tech/youtube/mary-meeker-makes-a-math-mistake-292735.php
August 26th, 2007 at 1:18 pm | Permalink
Hey Brandon,
I know about Mary Meeker’s numbers, and that’s not even what I based this post upon; I further saw the original post at Silicon Alley Insider about how off that was.
I think that estimates are just that — estimates. One of the things that we will never know is what percenage, for example, of videos will show ads. 1%? How about 5%? or 10%? That just multiplies things by 10. How about the CPM? $20 seems a bit steep, but who knows what kind of graduated pricing scheme might take place? Could anyone ever have predicted, for example, Adwords buys that are up to $50 - $100 per *click*?
My take on things is that the reality will be somewhere in the middle, but the estimates that were discussed early this week — depending on how they work out for advertisers (important caveat) — will probably be on the conservative side.
August 28th, 2007 at 5:17 am | Permalink
[…] the looks of this first attempt at monetizing YouTube, I think Google will be successful - and as Tony Hung notes, possibly insanely successful. The frictionless money-making machine trundles […]