Tuesday, August 22, 2006

YouTube Channels Advertisers

Marketing Rule #14523.322: When in Doubt, throw Paris Hilton at the problem.

I always felt that YouTube had made a critical error in launching without advertising. The system got to be hugely popular, and part of its reputation was that it was ad free. You could look at their growth and know that, at some point in their future, they would have to introduce ads.

And that would be a bad day. They would immediately be vulnerable to another service, which watched YouTube closely and maybe made a few tech improvements--but didn't have ads. Better to just launch with ads. There are enough non-intrusive formats that can put up relevant ads without compromising the experience at all. Even if there wasn't any revenue, it would be fine, because at least you are communicating to your users that advertising was a part of the model, and that it was OK. That advertising was not something to be avoided.

Then, if at some future point, you uncover some alchemical method of generating revenue from content without advertising, you're in great shape. You can have a big announcement that you're turning the ads off, as opposed to on. Or, at least you're changing the method in some way that is better or more interesting that the standard approach.

YouTube is starting to seriously bring advertising in, allowing brands to create their own channels. They are going to allow these advertisers the ability to brand their channels, as well. This is certainly more iteresting that putting up banners or pre-rolls. The first of these channels is for Paris Hilton.

The comments on the video tell the story. here's a sample from the first couple of posts:

  • Christ, let's hope youtube doesn't turn into the new mtv and just plaster nonsense sponsored content everywhere..
  • Yeah, I like YouTube how it is, with its own celebrities and the random shit people post...I don't want it to be like MTV.
  • This is what has pissed me off about youtube. now that it has become "famous", celebrities are all wanting to get on it to post their videos, which are edited so much that its not that great of a video. Most of them never go on these sites before they even become popular or even now to check out other people's videos.
YouTube has turned a corner, I suppose. The resulting product is certainly not bad. But the idea of setting up a company and pretending to shun ads is just not a good approach. It puts a landmine out in the future for you to eventually step on.
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Blogger mikethread said...

As some one who works in the internet industry, I think we are frequently too cynical about sites like You Tube, My Space and Facebook.

I have a 14yr old son who loves You Tube. He really does not care if they start making money advertising. Even at his age he get's it, that's how they make money.

As long as the content remains relevent to his life and the life of his friends and easy to access they will all continue to use it.

The challenge with these sites is remaining relevent with a very fickle audience and in a space with very low entry costs. That more than the introduction of revenue sources will determine the long term viability of the current flock of 2.0 pioneers.

You Tube's innovative use of advertising could may have more of an impact on advertising than anything. Just my opinion...

9:43 PM  
Blogger owen said...

i don't really see what the big deal is about these "brand channels". isn't every commercial or wanna-be commercial interest posting to you tube already a brand channel? the only thing different i can see about the paris channel (and the others like it) is 1) top tier placement, full size on the right and 2) sponsorship tie-ins (prison break, in paris' case) otherwise it's got all the same community features, video quality, etc. and it's as avoidable as any banner ad. i think you tube did a pretty good job integrating ads, if this is where it stops. it's my feeling that you tube blew up so fast in part 'cuz of no preroll/postroll ads...i think if they start with preroll postroll they'll lose audience. that's why you tube still has it right so far; the ads (channels) are opt-in.

9:06 PM  

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