Video Sponsorship Trends: “Cashing In” or “Selling Out”

I like this “Viral Video: Cashing In or Selling Out” by Jennifer Hollett (Canadian Globe & Mail), and not just because I’m featured in it. It’s actually a well-balanced view of the issues surrounding paid sponsorship and product placement.

dixie chicks sellout like charles trippyAs you may know, there are two different ways to make money via online video. You can share in the percent of ad proceeds based on the publisher (Revver, Metacafe, and now YouTube’s Partner Program). This is easier, but low margin. And you’re at the mercy of the publisher. Currently it would appear YouTube is selling fewer InVideo ads associated with amateur content, and I’m seeing more Google Adsense copy ads or display only. InVideo ads are far, far more profitable to YouTube and creators — selling at about $20 per thousand impressions. Advertisers get much more exposure, since the ads peek up at the bottom and are interactive (a far cry better than banners that we tend to tune out). The second way a creator can profit is by working directly with brands to feature products and services for a fair fee.

If you read this blog regularly, you’ll recognize my POV on this article (worth a scan). I satirize “selling out,” but I actually think you can find a balance between helping an advertiser and entertaining. I even contend that promotion need not come at the expense of the entertainment and vice versa. That said, I do respect the opinion of Kalle Lasn, editor in chief of Adbusters magazine and author of Culture Jam. Kalle, according to the piece, feels product placement on YouTube is a sad development. Lasn says there are already between 3,000 – 5,000 marketing messages coming into the average North American brain everyday. “I don’t think we really need 5001,” he says.

The article highlights (oh I hate that word) Brandfame, which helps facilitate the interaction between creators and sponsors. I’ve also met with Placevine, which represents a number of different brands interested in tapping creators. This article references a video I made called “Viral Video Broker,” where I spoofed this industry almost two years ago exactly. (Another one of those videos I wish I had shot with a better camera, but at least I was somewhat ahead of my time… the voices were, of course, people in my offices at J&J not real weblebrities).

fortune teller

Watch for five trends in this area in 2008:

  1. Creators are going to cross the line by pushing the advertising too hard, and alienating their viewers. It will feel right for them and their sponsors, but ultimately make for a jaded bunch of viewers.
  2. Brandfame and Placevine are the signs of an emerging cottage industry that will become more vital than the labor intensive machines helping broker product placement in television and films. Online video will give brands more inventory (it’s not called the “short tail” folks), access to niche audiences, and — here’s why the legacy firms will struggle — easier scalability. You’d better make it easy for brands and creators, and take a fair portion but not excessive. Product sponsorship is the only way many brands will penetrate the vital medium of online video, because it’s a fairly ad resistant one. In the “lean forward” generation of online-video, we’ll only watch your advertising if it’s interesting or if you force us. I’d content the sustainability of the latter is weak, and you’d have trouble arguing otherwise. Enter TiVo bloink sound, or the sick delight we take shutting a browser window that “serves” a pre-roll advertising with all the tact of a bad-breathed vacuum cleaner salesman. As David Spade said as a flight attendant on SNL, “Buh bye. “
  3. The online-video sites will struggle in this area. Currently mama Google doesn’t profit if I cut my own deals with Mentos (except when Mentos flighted my video as a 30-second ad). But it’s not an area of high concern since YouTube needs to focus on scalable revenue. What happens, however, if creators join forces and agree to sell prerolls embedded in the video file… a Toyota ad pops up gently in the intros or before the “Next New Network” bumper at the end of a clip? Does YouTube take issue with this advertising that they facilitate but don’t profit on? Or is it analogous to a producer selling his show, but retaining rights to a fixed amount of the ad space (I’ve heard Ryan Seacrest does this with his show).
  4. There will be no trend four. Trend four is often wrong, which itself is a growing trend.
  5. The backlash associated with hidden sponsorship is far from over. I wish there was a law that required film makers to disclose any paid advertisers, even though I know much of the “product placement” is offered free by directors. Federal Express, for instance, does not often pay to have its boxes appear in a film. The directors want the film to feel authentic, and seek permission not pay from FedEx to avoid needing to distract viewers with a Garbagepatch Kids-like bastardization of FedEx (FoodEx). In the end, however, I feel like the video creator owes me, as the viewer, disclosure. If you’re getting paid to hold a Mountain Dew, more power to you. Just let me know, so I don’t feel like you’re being sneaky every time your camera pans a mall and I see logos.

32 Replies to “Video Sponsorship Trends: “Cashing In” or “Selling Out””

  1. Re: Trend 3:
    In my recent video “The Camping Thing”, my granddaughter holds up a can of Mountain Dew and offers me a sip. Totally unscripted and incidental to the main focus of the video, which was a four year-old’s take on campsite bugs. Metacafe rejected the video. They must be sponsored by competitor Coke.

  2. Okay, one more thing: Revver, Metacafe and Youtube are not the only outfits who share ad proceeds as you imply in the 2nd paragraph of this post. Veoh has InVideo ads on my videos there. All of them, I think. And doesn’t Blip have some sort of revenue sharing? Lucy stopped sharing, but I think there are others. Just a point of order.

    Revver $5,614
    Veoh $1,200
    Metacafe $0
    Blip $0
    YouTube $0
    MotionTV $5
    Viewbug $45
    Vume $0

  3. Movie makers have been hiding sponsor logos in film for years. Was 30’s vintage stock footage of Time Square hidden marketing for General Motors? Maybe. How sly were they really? The average consumer has rebelled against ‘in your face’ shouting from the used car salesman. I have a friend who , when a loud ad came on the television , would quickly turn the set off and exclaim “Don’t yell at me”! I think he speaks for the public at large. Marketing on the whole has taken on the worst aspects of the carnival barker. Stealth marketing will be fine until they start to shout. Then we the viewer/consumer will have the option to say ‘don’t yell at me’!

  4. If the Dixie Chicks get a cover like that for selling out, I really hope that Avril Lavigne, and the lead singer of Paramore start selling out soon, then, too.


    I also love Marilyn taking the time to write a comment (#6 above) saying nothing more than “I got nothin'”.

  6. Hey, Rob, don’t go thinking I’m stealing Letterman’s material. I get up at 6:00 AM and don’t get to bed much past 10:00 PM, so I never see Letterman. I wanted to comment, but couldn’t think of anything clever to say. Not that I am usually clever. That honor goes to sukatra.

  7. I think the product placement is the least alienating form of marketing. Granted, I have no marketing skills whatsoever. It’s just very subtle..very non-invasive.

  8. ^a – crud! too fast

    say anyone think Yahoo videos will start paying creators?

    Would be a smooth move. I can’t think of any other site that has the potential to give google/youtube a run for their money…

  9. Could be a contender.
    YouTube 1,186,985
    Revver 807,537
    Veoh 423,206
    Yahoo 352,747
    MySpace 82,314
    Crackle 57,189
    DailyMotion 35,762
    Metacafe 29,854

    Viddler $0
    Brightcove $0
    Panjea $0
    MediaTipper $0
    Lucy $0

  10. Yahoo almost has to jump in the game, google is chomping at everything. You can bet MS is seriously thinking about it, 44 billion times so far.

    Yahoo 352,747, mdj is that number of videos or creators?

    Either way, yahoo is poised to cut into youtube. Unlike revver or veoh yahoo has the infrastructure and most of all the $!

  11. Correction. That’s the number of views my videos have gotten on these sites since July 27, 2007. That’s as far as my records go back. I’ve been putting videos up since October of 2005.

  12. What about a trend to make video ad units more interactive? It’s true that ads that “are interactive [are] a far cry better than banners that we tend to tune out.” I work at a video platform company,, so I have a vested interest in this. Nevertheless, I feel that as the online video ad becomes more commonplace, it will eventually perform as traditional banner ads -unless you build more interactivity beyond the “close” or “skip” button.

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