YouTube's InVideo ads give advertisers yet another place to spend money

MediaWeek, along with a ton of other media news sources has reported that YouTube will begin inserting ads into the content on their site. According to the article:

"YouTube executives say that these ads are designed to be as non-intrusive as possible to users while balancing advertiser needs. InVideo ads don't even appear on screen until a video has been playing for at least 15 seconds, and they then disappear 10 seconds later unless clicked upon."

This is a big development for several reasons, not the least of which being that YouTube, Facebook, MySpace and others are leading an advertising revolution, siphoning ever more money away from traditional media (i.e. television, print or "old-school", etc.).

The main benefit that YouTube touts is similar to our pitch for out-of-home advertising: it targets a very specific audience at a time when they are well positioned to take an advertisement to heart, and hopefully act on it. With OOH an ad might reach a consumer in a department store where she's just a few steps away from making a purchase. On YouTube a viewer might watch a video of one of their favorite bands playing live and then watch an ad for that band's new CD pop up, leaving them only a couple clicks away from an impulse buy on Amazon.

On the flip side, one of the major issues this raises (which also makes it similar to OOH advertising) is how viewers will tolerate the extra level of intrusiveness. Will they be put off by how much the ads interfere with their media choices and avoid using the service? The YouTube execs were silent on the issue because, put simply, this is going to annoy people. YouTube viewers are not used to ads popping up in the videos and there is sure to be a backlash. In fact, one of the reasons the site became so popular in the first place is because it was "by the people and for the people" and it didn't belong to "the corporations." Sadly, those days are gone and now YouTube's cultural weight has to reap financial rewards. The key will be finding the right balance between keeping the annoyance factor low but still yielding strong results for advertisers.

Want to hear more opinions on the matter? There's a great c0nversation on this very topic taking place on LinkedIn right now, so check it out!

Tags: Google, YouTube, advertising

Google purchases DoubleClick, makes deal with ClearChannel

In case anybody still had doubts about Google's advertising ambitions, they announced a few deals over the past several days that will put them to rest once and for all. First, in an effort to solidify their position as the preeminent Internet ad engine (and to piss off Microsoft, I'm sure), Google plans to acquire DoubleClick for an insane $3.1 billion. Combined with today's news of a massive deal with Clear Channel to sell radio ads on their 1,650 US stations, and hot on the heels of a recent deal with EchoStar to sell trackable TV ads, the search giant is doing everything possible to diversify into other areas, since Internet search advertising still made up well over 90% of their revenues last year.

However, all is not roses for the do-no-evil company. First off, it's unclear whether the DoubleClick deal will go through (though to be honest I'd be surprised if it didn't). Microsoft, AT&T and maybe some others are already lobbying the State Department suggesting that Google's acquisition could give them an unfair advantage. While the notion of Microsoft calling somebody else monopolistic and anti-competitive is ironic (and that's putting it kindly), the suggestion is worth considering. Google already collects a huge amount of personal information from its search engine and affiliate advertising systems, and augmenting that with DoubleClick's technology could make things worse. How bizarre would it be to see Bill Gates and Nadine Strossen, President of the ACLU, showing up on the front cover of the Times together? I tried to come up with a pithy good-vs-evil metaphor to describe it, but I don't care for either of them very much, so my best one-liner involved Satan and a slightly less-evil Satan (which really isn't very compelling).

Meanwhile, both Google and DoubleClick have been experimenting with in-store media for well over a year, and of course Clear Channel is on an outdoor electronic billboard construction boom. Consequently, the consolidation of power here is something we need to be watching very closely. While I'm sure that the TV, radio and Internet advertising folks are much more nervous about this than we digital signage folk are (oddly, the small size of our market is a benefit in this case), companies that want to stay competitive will need a steady stream of market-centric innovations to stay relevant.

Tags: Google, DoubleClick, Clear Channel, retail media

Google enters the TV ad sales market

Just as they've been threatening to do for a while, Google has partnered with EchoStar to deliver TV commercials to the network's 125 channel DiSH Network. Google hopes to bring the same kind of media measurement capabilities to TV as it currently has for its web-based AdSense system. However, while the prospect of measured TV media has some advertisers drooling, the AP, the Wall Street Journal and others all note that larger cable providers are likely going to be resistant towards such an approach, since it could wreak havoc on their incumbent system of up-front ad sales.

The first incarnation of the Google system is not only an auction house that allows advertisers to specify how much they're willing to pay for certain time slots in different demographics, but also uses EchoStar's 2-way communication system to actually measure the number of set-top boxes that tune a particular ad, giving advertisers unprecedented visibility into the consumption of their marketing messages. It's unclear whether this data is going to be used for directly billing the advertisers on a per-view basis or whether it's strictly a measurement capability, but if AdWords has taught us anything, the latter will necessarily lead to the former if this project proves successful.

That's probably the scariest thing to old-school networks, measurement companies and Madison Avenue execs. The half-century of tradition that has led to high prices and poor performance for many ads has more or less guaranteed revenue to these companies since there has been no alternative. With deeper insight into how commercials actually function, when and where they work best, and who's actually watching, many network advertising slots could suddenly become much more valuable, but there's an equal chance that some number will be much less valuable than what they're sold for right now. It's that uncertainty that has the networks sweating right now, and hopefully Google and EchoStar will come forward with some performance metrics after the first few months that will settle the argument once and for all.

I've been following Google's trek down this road for a while. Other articles and blog posts include:
Will Google's new video ads find their way onto digital signs?
YouTube gives Google a killer app for digital signage displays
Google wants to run your digital signage network, patent says
Will cost-per-action ads find a home in the retail store?
Who will bring user-generated content to out-of-home media?

Tags: Google, telvevision, commercials, advertising