How YouTube will make money with (off?) their publishers

After a few video ads had been seen during trials, YouTube has officially introduced its long expected video advertising program. The video ads come as a video-in-video, will show 15 seconds into the clip and Google requires the advertisements to be entertaining, a key point according to us. The ads, which are required to be in Flash format, should be relevant as always but, in good Google fashion, not annoying or intrusive.

The entertainment factor is a big point for YouTube / Google, and rightly so. As they chose not to use a pre-roll or post-roll format, their aim is now to select ads that are in line with the videos, and in the best case have them add something to the video. This is not an easy task and for now, YouTube will do this by hand. At a CPM of $20 (according to the NYT) the manual work hardly seems worth the effort.

It seems that because of that, YouTube is trying to get the content producers involved. YouTube already splits the revenue with the publisher fifty-fifty. It seems that Google is going towards a model where the publishers select the advertisers (rewarding entertaining advertisements) and YouTube only provides the channel and makes 50% of the ad revenue. Not a bad deal and a good solution until YouTube’s filters have evolved so much that they can automatically define the contents of a video, filter unwanted content and then combine the right ads with the right videos.

Until that time, YouTube is set to finally make some money off their popularity, with the help of content producers and without upsetting its customer base.

(picture taken from Search Engine Land)

This entry was posted on Wednesday, August 22nd, 2007 at 7:15 pm and is filed under Video Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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