BUSINESS BLOGS
BUSINESS BLOGS
category: business
04 May 2009
related tags: Video | YouTube | WatchMojo.com |

Google’s $1.65B baby YouTube is making a mistake on cracking down on unauthorized product placement in videos.

Let me explain:

- We’re a content provider with over 3,000 videos on the site though we have never done this, ever.

- The site is perfectly in its right to block anything scrupulous, but it would generate more revenue if it did the following:

As with most content providers, we have the right to sell ads in and around our content, but we need to follow a set of guidelines (I don’t think I am violating any NDA as this is all well-known), but these guidelines prohibit trying to sneak in product placement, which in of itself makes sense.

However, seeing how YouTube can use all of the help it can get to monetize the site and lure branded advertisers into the fray, I would suggest that YouTube let this practice continue… and if and when the advertiser and partners need more reach (more streams, pageviews etc.), that they then do a revenue share on that product placement, too.

Ultimately, the main challenge on YouTube is getting videos (and ads) seen.  YouTube can make that happen when it features videos.  But if a partner can go up to YouTube and say

“We have a $100,000 insertion order (IO) for a Coca Cola campaign which involves product placement, but we will not be able to deliver the promised inventory alone, can you run this?  We’ll give you a cut”.

In other words, it should let content partners do the whole ad sales pitch and closing (you have to pitch a hundred clients to close one deal), so YouTube can free up its resources by letting all content partners have the implicit right to pitch product placement, and then based on the content, product placement, ad rates and budget, it should then feature the videos in question to maximize (actualize) the budgets as it can help with getting the videos more visibility.

If it did that, it would better scale sales.  Once they’re making billions, they can rein this in and force advertisers to go through them… but right now, they’re c***-blocking things, if you pardon the language.

Again, we’re a content provider and don’t do this because we don’t want to piss off YouTube, but if YouTube considered it, it would probably drive more revenue because we have ad agencies calling us with RFPs looking for branded content opportunities.

Big picture: ultimately, this shows the challenge facing all video companies:

- if you are a content site, you have to learn to succeed within YouTube’s rules, which is, to quote Andrew Dice Clay’s character Ford Fairlaine, akin to “masturbating with a cheese grader, in other words: effective, but painful”.

- if you are a technology vendor, you are beholden to getting in on YouTube’s platform, otherwise you’re moot.

We’re fortunate to have cracked the YouTube challenge, most are not so lucky.