As an entrepreneur and executive producer of a video content publisher, the major issue I have is the lack of standards and platforms. I’ve written about this before, but in a nutshell, when it comes to formats, you have Apple’s Quicktime (AVI), Adobe Macromedia’s Flash (FLV), Microsoft’s, etc.
Of course, much the same way that a few years ago Real Player was synonymous with media files and today it’s not necesssarily so, things have changed quite a bit in the space and the main format is FLV, partially popularized by YouTube.
But when it comes to platforms, there is no market maker. Everyone is a price taker, so to speak.
Google has already won in search, much like MSFT won in software.
Google has also already won in online advertising, 1 out of every $4 of online advertising spent in the US goes through Google’s coffers.
The third pillar then, is video.
Google did not win the video arms race, hence the rationale to buy YouTube, the clear market leader in the space, for $1.65 billion in stock.
But even with YouTube, Google’s future as the king of online video is not guaranteed. For one, the copyright liability remains. But more importantly is the lack of business model attached to online video.
Will it be pre-rolls? Not sure.
Post-rolls? Who’s watching that?
Text ads alongside or underneath? Give me a break.
What about an ad logo… ok, maybe.
The point is that it’s not what I say that counts, it’s what the market accepts. But before “what the market accepts” is determined, we need a marketplace.
Google leveraged its superiority in search to create a marketplace for online advertising.
In this context, it is much, much easier for Google to leverage search and online advertising (of text-based ads at least), along with the existing popularity of Google Video and mainly YouTube to dictate the terms of a video marketplace for content and ads.
This is partially why Google recently poached NBBC top man: to extend their product into a comprehensive ad marketplace.
What Google should do - if they are not already thinking of doing - is the following:
I) SUPPLY:
1. CONTENT
- Allow content owners and producers to submit content - they already do.
- Google scans content and tries to tag it with metadata - not sure this is really being done, there is no leadership from Google on video search, at least not yet.
- Google should also allow publishers to tag content with keywords. They currently ask for a description but that is stopping short.
- Google would then subsequently match their description, metadata with what the publisher uploads as metadata, keywords, tags etc. Unless Google leverages the publishers, video search will always be off. Video is a far more complicated cup of tea than text to index… and even Google’s much vaunted PageRank misses a lot. And that’s for text, not for video.
- Google would then grade the accuracy and reliabilty of each publisher. This ensures that publishers do not try to spam or mislead the descriptions.
In other words, the same way that Google uses a weighted average to ensure that the top paid ad listing is the one that yields the highest revenue and not the one that pays the highest CPC; Google would ensure that the highest ranking publishers are those whose content is of relevance and that properly index their content. This will allow for video search indices of video content to scale much faster.
2. AD INVENTORY
- The publisher would then choose which categories of ads it accepts to be sold against its ads. For now, “against its ads” is broad. We’ll clarify further shortly, below.
- More importantly, the publisher chooses what kind of ads it accepts from a choice of a) pre-rolls, b) ticker-style information underneath content, c) post-rolls, d) overlay, e) watermark etc…
- The publisher then enters either:
a) a bid CPMs (ideally, video is too expensive too produce for this to take off on CPC; no self respecting video publisher will or should accept CPC pricing; make it CPM and all content creators will adopt this) and/or
b) a revenue share from Google.
- The publisher would naturally ask for higher revenue for each more obtrusive ad format.
Over time, the viewers will decide what they accept, if the pageviews are there, then they and not Google, publishers or advertisers decide what becomes the “Ad Sense” of video. By “Ad Sense” we mean the most successful platform and marketplace. Call it AdView or AdVue… oh wait those are taken, go with Advyou (YouTube play?).
The more the publisher asks for, the less likely Google will push up said publisher’s content. But, the better the content, the more people might click on the content… and as such, the more pageviews (oh right, pageviews are dead…) are generated for advertisers to buy and publishers to sell… through Google.
The “big idea” here is that there will not be one silver bullet that will create a perfect mechanism for online video content and ads, but a hybrid approach would work, and the one company that has the strength as a market maker and reach as a price maker is… the Big G.
II) DEMAND
On the demand side, advertisers do the exact opposite.
They upload text ads, pre-rolls, post-rolls, overlays, etc… and choose what categories (or even specific publishers) they want.
This mechanism would be far more scaleable that something that is manual (for one). And Google’s massive reach automatically adds volume to the marketplace.
More importantly, it also gives media company content owners who do not see a value to working with Google Video/Youtube now to work with it.
Of course, this means that they further strengthen Google’s grip on ad dollars… but hey, at least they reach audiences where they are and drive them to TV, print and online where they can sell incremental ads and generate more revenue.
This matching principle ensures that a meritocracy builds around both content and video advertising without once again having a vocal minority decide what should be the modus operandi.
Mainly, Google has a magazine, print and radio foothold, but TV, they do not. This way agencies will not view this as frightengly, even though admittedly the writing is on the wall.
Why? Over time TV and web video buying and planning will collaborate… Determing who supercedes who depends largely on initiatives such as this…
Any thoughts?
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WatchMojo NewsletterI’m really not the type to smile when others suffer setbacks, seriously. I wish everyone well, even my erstwhile colleagues who sued me (and embarassed themselves, mind you) last year. One day, they’ll realize the error of their ways, if they haven’t already. Of course, I don’t wish them too well [in the courts] because they’ve yet to drop their case, technically…
Anyway, onto things and people that matter (actually, not sure this does either), today I see that Wallop, the social network that was spun out of Microsoft saw its third executive leave in one week. That can’t be good for business.
As I had written last year, I had spoken to MSFT about Wallop before it was hatched into what it is now, and got, well, no respect. Read more of that here.
Regardless, hopefully they can turn the tide and do something useful, 2007 is poised to be the year where social networks start to gain traction on the revenue front, though I am not sure what Wallop actually is and how it is positioning itself vis-a-vis the eighteen hundred other social networking sites.
A roundup of interesting, candid and straightforward feedback from writers and journalists with regards to what works from PR agencies, and the Public Relations ecosystem in general.
Courtesy of Valleywag, enjoy.
