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Everyone hated ads on blogs too... years ago. Believe me, I know. I wrote an ebook about how to make money blogging years before bloggers were making money. "Blogging isn't about money," people wrote to me. Countless emails like that. Now look around today.
So are ads in video now bad too? Jaffe seems to think so. In fact, he calls this move by YouTube "dumb."
Perhaps, I certainly respect his opinion, however I don't have to agree with it.
I’ll argue differently. Aren't we simply resting on the cusp of another big technology swing (like when blogging emerged)? I think so. Online video is going to be bigger than blogging, by tenfold. Right now it's raw, uncensored and untouched (until recently) by the dreaded "ads". Just as all new things are when they first emerge.
But just like any medium, the ads will find a way to work themselves in. From the guys who are working to show you an ad while you're fast-forwarding your Tivo-recorded program, to the other guys who sold an ad for a local dry cleaner in your pizza box cover. Ads are always going to be there. I think everyone gets that.
YouTube didn't do this to make money. If you look at the numbers in this, the projected revenue they can earn from this is very, very small compared to their net worth and gross revenue. Nope, this ain't about the money.
This is about being first. And continuing to be #1.
YouTube/Google holds the world’s largest collection of advertisers in the palm of their carpal-tunneled hand. Were they going to let 100 other competitors eat away at their client list by offering something they didn’t want to offer?
The answer is no.
Will this cause a small, insignificant defection from YouTube? Yes, so small nobody would ever notice. Will this entice even more people to post their videos at YouTube in the hopes of earning a few bucks? Yes, and way more than the people that defected.
Google isn't dumb Joseph. Look back at this in a year and tell me they are. I don't think you will be able to.
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Comments
"This is about being first. And continuing to be #1."
I wouldn't assume they will continue to be #1 just because they're getting advertising money. What matters to advertisers are results, and they can be measured on this medium like they've never been able to measure before.
There is nothing this "service" is adding to the experience or to the advertiser that someone else couldn't do with a banner ad.
It isn't innovative. It is at best forgettable and at worst annoying. And if they annoy their audience too much, they'll tune out and won't be long at #1. They can still keep the prestige of being first (for who can take it from them?), but it's the other thing that matters the most.
I just think we ought to be setting the bar higher. This seems to be a cop-out, and more importantly, the numbers show it to be ineffective.
Posted by: Cam Beck | 08.23.07
I very much agree with you, except that it is almost certainly about money. YouTube lovers have been wondering for some time now how they will continue to pay their bills if they don't bring in any revenue.
I think Google is taking a risk, but it is a calculated, innovative one. If people get too annoyed, they will be able to adapt, because, as you state, they have first-mover advantage.
Posted by: mgroves | 08.23.07
@mgroves, it's not about money to YouTube. The number crunching proves that.
It's about money for the publishers, and for the stockholders, but not Google's profit/loss.
They don't have first-mover advantage as much as they really have 800-pound gorilla advantage.
Posted by: Jim Kukral | 08.23.07
It doesn't have to be huge amounts of money right now: just a sufficient NPV. If it's ultimately not about money, then why would Google buy YouTube in the first place?
Posted by: mgroves | 08.23.07
"why would Google buy YouTube in the first place?"
So Microsoft couldn't? I dunno. That's way beyond my level of business expertise.
I'm just a marketer.
Posted by: Jim Kukral | 08.23.07
Jim -- The people at VideoEgg.com claim that they've been using this format for over a year. Granted they don't have the traction of Google, but they seem to have been first in the tactical implementation. There was talk of them having a patent, but I am not 100% on that.
Posted by: Matt Dickman | 08.23.07
Let's do a real world test and see how long a person can watch youtube videos without being annoyed by the ads. Let's stick some crazed video lover in a room with some popcorn and tell him he can't leave until he pushes the big red "ads suck" button! Come on, Your eye will be annoyed if you're engaged in someone's video. Don't be too fooled, you might just realize that soon, everyone is going to get blip'd!
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Posted by: K.Sako | 11.05.07