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July 9, 2008
Google Can't Fix All of YouTube's Ad Problems with 'Project Spaghetti'
Google is struggling to monetize YouTube and will fall short of revenue projections this year, according to the Wall Street Journal. Tim Armstrong, Google's President North American Advertising and Commerce, told the Journal that 105 problems have been identified with YouTube's advertising process. Meanwhile, 24 different processes were identified for search advertising. Now, "Project Spaghetti" is in full swing to help streamline the processes.
YouTube's monetization problem may not be as severe as reported. Last month at a Triangle Interactive Marketing Association meeting, Google said that YouTube's branded channels come with an agreement for clients to spend $200,000 in advertising the channel on their Content Network. Otherwise the channel is "free." Obviously those aren't YouTube revenues, but it does funnel money elsewhere in Google.
Still the bigger question remains in the ability to monetize social media. In May, eMarketer lowered its projections for social network advertising. While users are open to ads on social networks, many find them irrelevant. Mix in the fact that advertisers are wary of marketing their product next to some of the crazy social media content out there, and you've got yourself a regular conundrum.
YouTube is expected to begin pre-roll and post-roll ads (ads before and after vids) in the third quarter, but don't expect that to go over well with users. Or advertisers. Or even Google in the long run. With one of the core problems being relevant ads, simply adding a new type of ad to the mix doesn't solve the problem.
Plus, pre-roll and post-roll ads are akin to TV ads, where branding is a key focus. But with the economy and Google's own shifting of the ad marketing place with pay-per-click ads, more and more advertisers are looking to direct response methods.
Posted by Nathania Johnson on July 9, 2008 10:06 AM
Comments
To make money with YouTube, this is what Google has to do...
On the most viewed clips (clips with, let say, already 1000 views) (doesn't matter who posted them) YouTube automatically implements a 5 seconds overlay ad that appears over the player and blocks out (darkens) everything else. (It gives a bit of time for the clip to load in the background as well).
This overlay is a 5 seconds spot (can't be longer than that and it doesn't link to a company website if you click on it. It's like a really, really short TV spot. It can be a still picture for outfits with very little budgets...)
Now, people don't like ads... but they like GAMES and they like to COLLECT stuff.
Each overlay ad is a mini 5 seconds GAME. You have three colored dots on the overlay. The viewer clicks on ONE of them. One is a winner, two are duds. If you're lucky to pick the winner (you only have one chance) during the 5 secs, you receive a TOKEN that is automatically added to your YouTube account. (It encourages you to stay registered...)
Now, you COLLECT these tokens. If you win a certain number of similar tokens, you can EXCHANGE them against full-length HD Hollywood Films or TV shows on YouTube. The fun part could be that you have different categorires of tokens. (Some would be for specific film genres or just for one TV show and some could be really hard to find, worth maybe ten tokens, etc.) (Tokens are generated randomly by the system.)
Now, you have the problem of guys posting shows and seeing Google make money off their film. Well, they need to be rewarded too. For a succesful posting (ie lots of viewers) they also receive TOKENS... to be exchanged to watch high-quality HD movies or TV shows.
Now, these HD movies or TV shows in the "HD Theatre section of YouTube" can also be sponsored with a longer lead-in spot... That's even more money for Google.
Now, we have the problem of big brand names not wanting to have their spots stuck on "Jimmy and his weird cat"... Well, they could "control" where their 5 Secs. spots go by teaming with content suppliers through YouTube. Example, a Coca-Cola campaign with Viacom clips... Viacom takes all the succesful shows they own like, for example, "Spongebob". They cut out little "gems" (two to three minute clips) and they post them on YouTube to watch for free... Viacom via Google sell their 5 second spots to Coca-cola. Everybody is happy. The viewer, who enjoys these mini-clips, can even link to the full episode of Spongebob on YouTube. He can pay by redeeming TOKENS or he can pay with real money for the full episode or combine both. (It's all streaming anyway! It's like TV a la carte.)
Now, what about the "Jim and his weird cat" clips. Who pays for these 5 secs ads? Well, it's like Google's Adsense, it's small outfits who purchase so many spots. You can buy a thousand spots or ten thousand spots to be randomly placed on clips or based on the clip's TAGS and on the clip's level of viewership. The outfit supplies the spot or the still and pays Google directly up front.
A system like this is not that difficult to implement. (If they're real smart, they can have it work just the same on imbedded videos on other sites) Anyway, it's fun for all involved and all get something out of it. Everybody is a winner especially Google who makes tons of money from the big guys but also... most importantly...from the long, long tail of all the little guys. Viewers are hooked to YouTube forever! Even if they're just there to click on ads and forget about the clips... the most important is done. Money!
Here, you have it.
Twowan,
(If Google wants more ideas like this one, they can contact me. I'm the guy behind laboratoryfilms.com)
Twowan November 6, 2008 8:39 PM
