Wednesday, April 30, 2008

It's Relatively Hard for Google to Sell Ads on YouTube

It takes longer to bring in a YouTube dollar than it does to bring in a search dollar.

-Tim Armstrong, Google's top U.S. ad-sales executive

He was conceding that selling space on Google-owned YouTube is more labor-intensive for a variety of reasons than selling space on Google's famous search engine. Some of the reasons are logistical (display ad-selling is difficult to automate) and some relate to advertisers' fears of placing ads next to amateur videos created by amateurs that may embarrass the advertisers.

In Jon Fine, "YouTube's Buried Treasure," BusinessWeek, April 24, 2008.

This "problem" of advertisers' fear of being near unpredictable amateur videos has created a nascent market for technologies that scan videos to vet content before placing ads next to them. Google and MySpace have also been allowing advertisers to set up special zones for themselves. The problem with such zones is that people may not want to go to areas just to see marketing messages. So Google has been experimenting with placing popular, vetted videos in those zones as magnets in the hope that searches for the videos will bring in the right kinds of visitors.

The undervaluing of social-media sites by marketers and media firms' attempts to fix the problem so they can charge higher prices for ads is not a totally new development. It recalls the structural influence that sponsors have historically exerted on newspaper, magazine, radio and television content.

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