BUSINESS BLOGS
BUSINESS BLOGS
category: business
09 Jul 2008

According to WSJ, Google’s YouTube might open up the site to pre-roll and post-roll ads.

From CNET:

YouTube has been plagued with inefficiencies in its ad-sales department and Google is apparently ready to abandon its policy of keeping preroll and postroll ads off the video-sharing site.

• Google has identified 105 problems with YouTube’s ad sales.

• Advertisers aren’t willing to post their ads on many YouTube videos

• Because of legal questions, Google is only selling ads against video clips that have been approved by media companies and other partners, which, according to the story, is 4 percent of the total clips on YouTube. Think about the significance of that. Every minute more than 10 hours of video is uploaded to YouTube and only about 20 minutes is worth anything to the company.

And we’re in that 4%, baby.  Look at one of our videos… see that 3-second pre-roll bumper saying WatchMojo.com?  If YouTube (or any site) ran a 3 second - 5 second tops - video pre-roll… it would, could work.  If they go crazy and run a 30 second, even 15 second ad, then yeah, they will lose users.

YouTube has enough sway and market maker status to get away with telling advertisers:

- 3 second
- 5 second
- 7 second
- 10 second
- 15 second

are the only options - not even sure you need all of those options, why?  When you have too much choice, you tend to take too long to decide, and YouTube needs to move and move fast on this front.

And yeah, sure, they can run 30 second spots before longer programming, but good luck with that, especially with the otherwise fickle YouTube audience (oh, fickle is usually described as “passionate” online - another pile of PR BS).

Anyway, it should impose stricter frequency caps in inverted order, as

- 3 second - capped at 1 ad per 2 videos
- 5 second - capped at 1 ad per 3 videos
- 7 second - capped at 1 ad per 4 videos
- 10 second - capped at 1 ad per 5 videos
- 15 second - capped at 1 ad per 10 videos
- 30 second - capped at 1 ad per session

Something like that… as per rates.  All right, I have an NDA in place with YouTube, but I will say this… last year when YouTube began to monetize the site with its partnership programs, they threw out a CPM rate.  No one in the room said enough, but everyone probably knew it was a tad ambitious.  I know what WSJ, TheStreet, CNET, etc. charge for video ads.  YouTube is no WSJ, if you know what I mean.

So I would make this a no brainer for advertisers:

- 3 second - $10 cpm
- 5 second - $12 cpm
- 7 second - $15 cpm
- 10 second - $20 cpm
- 15 second - $25 cpm
- 30 second - $30 cpm

Again, not saying it should have ALL of those lengths… but that kind of scale would work.  Another thing YouTube (and MySpace, Veoh, crpsrt, etc) could/should do is lure more users from UGCrap towards better paying, premium content.  Hum… yes, I’m biased in saying that, but net-net those distributor sites would win more than we would.

I got news for you YouTube/MySpace/etc.: even your users want to see better quality stuff, but finding quality content amongst the crappy clutter quickly becomes cumbersome.  Holy crap that’s one heck of an alliteration.

As per rates:

Add $5 to those rates if they take the companion 300×250 ad
Add $10 to those rates if they take the companion 300×250 ad and the overlay, which Video Egg, BrightCove all allegedly invented, in between their Series Q and R rounds.

Just my two cents.  Hmm…YouTube, you can send me my consulting fee along with the WatchMojo.com partner program revenue check, thanks.

All right, it’s 5:40am, back to sleep.