Ladies in gentleman, in this seminal post, I shall speak to you not as a video entertainer but as a student of psychology, a practicioner of marketing, and a former magician (age 10). Watch in awe as I explain why our human species has trouble predicting the future, why some of my online-video foresight has been subject to such annoying external factors (not my own failures, of course), and how marketers survive. Then gaze in bewilderment as I change the subject so artfully that you conclude with a round of applause for my genius, and your keen intellect and humor for appreciating it.

As you loyal readers surely know, this blog has periodically devoted itself to predicting the future of online video (see 2006 post), and my soon-to-be-published “Beyond Viral” has a short chapter that attempts some quite risky futurspection*. It may not surprise you that it was the last chapter I wrote, the one I procrastinated the most, and the one that will surely be wrong in as many ways as it’s right.

But you and me? We’re a lot alike in that way. We are all clueless at predicting the future, even though we’re masters at looking back in time to convince ourselves otherwise. We revise history to confirm that we purposely selected the path we stumbled into quite by chance. Ask yourself about the last major change you made (change in job, relationship, geography, etc.). If it was more than a year ago, the reasons you recall justifying it are entirely different from the ones that caused it. By now your psychological white blood cells have attacked that virus of a notion, but let’s move on… Common, drop it I said. Dropppp it. Keep reading. Good boy.

There are, of course, a number of problems our species has with making predictions:

1) We can’t escape “present bias” in making  predictions (a subject well explained in Dan Gilbert’s “Stumbling on Happiness“). For instance, in this 1960s futuristic view of today’s technology (video below), you’ll see that both members of the household enjoy the use of “televisions” (not monitors) and hand write communication that is sent from a “post office” in their very homes. What makes this video so humorous, of course, is that it completely overlooks the changes in gender roles. Wife is spending, and husband is busy using his multiple monitors to figure out how to pay for them. Oh, and neither have apparently adjusted their hair for the future.

I encourage you to check out Gilbert’s book if you share my interest in pursuing happiness, spiritual curiosity, amazement with psychology. I believe my next book (yes it’s time already to think about that) will be partially drawing upon Gilbert’s wisdom to provide marketers with new and entertaining ways to manipulate us transparently: let’s call it transmanipulation*. Does that sound odd? Than you haven’t seen my video about why I decided to become a marketer (click to see video about my experience with the $1.25 “flying ghost”).

Where was I? Oh- check out this video and ask yourself why it’s odd. The multiple monitors? The pen reader? The haircuts?

2) We tend to overestimate the short-term changes, and underestimate the long-term ones. (Better put by Naughton in 2008, “THE FIRST Law of Technology says we invariably overestimate the short-term impact of new technologies while underestimating their longer-term effects.” When I began imagining the future of online video in 2006, I expected online-video and television to have merged by now. But I failed to imagine far more interesting things like how we’re slowly beginning to consume more video from our smart phones, and about how television and online video continue to co-exist.

The big stuff creeps up on us like the frog in water that gets slowly hotter (legend has it that he’d jump out immediately if it was boiling to begin with). If you haven’t heard this analogy before, or investigated the flaws in it, then you really need to spend more time with some marketers.

3) Vested interests retard progress. This quote, from a wonderful 1950s article in Popular Mechanics predicting 2000, explains this challenge well. When I imagined integrated online-video and television, I underestimated how the economic interest by cable providers would delay what is readily available. Although ANYONE with moderate income can enjoy online video from their HDTV, few do. That’s because most of us are so lazy or uninformed that we default to the box that Comcast or Verizon sell or rent us. Then we laugh about how our grandmother is still renting a rotary phone from Mah Bell.

Predictions for 2000 (Popular Mechanics, January 1950)

Yes, friends, today’s technology is not entirely driven by possibilities and your preferences and demand. You’ll get what the economy rewards, even if that means you’ll buy your iPhone and iPad and give up Flash. And you’ll switch from one telecommunications provider with great coverage and low prices to another… because your emotional desire for beautiful and prestigious gadgets overrides your logic. Sorry, folks. The brain is the rabbit in the “hare versus turtle” tale. Bet on the heart.

Wait this time I switched subjects by accident not on purpose. But just out of curiosity, did you click the word “retard” in this section’s title?

4) We selectively recall predictions we and others called accurately (and ignore or forget the ones that were wrong unless they were wonderfully and profoundly wrong). This inarguable psychological nuance is the basis for a booming industry of futurists and psychics. Even their victims help their cause, like many Notradamus faithfuls do when selectively interpreting his predictions. But before you feel too proud to be above that, consider why you might visit a psychic… then later recall just a few of the things he/she predicted quite accurately. You know the Pied Piper is manipulating you, but dang that pipe plays a mesmorizingly* attractive tune.

While in 2006 I predicted fairly well the consolidation of online-video sites and the evolution of a network aggregation model (Hulu), I also thought some online-video stars would become television and film stars. Whoops- failed to appreciate that the television/film economy still mostly under estimates or snubs “weblebrities,” and that many have gained more income and larger audiences by NOT being plucked from web obscurity and graced with attention from talent agencies, representatives and producers. I’m also seeing more clearly that what makes a web star (talent, self sufficiency, persistence, social networking, interaction with audience, thick skin, diversity of skills) is quite different from what makes a television or film star (good looks, acting chops, Hollywood network, good timing, the right gene pool, ass kissing).

And of course sometimes I like predicting things unlikely just to generate some controversy or get people to think.

So why, you ask, am I reflecting on the “problems of predicting the future of online video” (or any crystal ball gazing)? You didn’t ask that, but I made you think you did.

Well its’ pretty simple. I’m using this post as an exercise in addressing cognitive dissonance with public use of rationalization, ego defense and misdirection. But now you think you saw that all along, right? In 2006 I predicted “marketers will get smarter” about online video. And although financial predictions suggest 2011 the space will flourish, I failed big time on that account. As a career marketer, I should have known one thing with certainty. We marketers will not get smarter in a year, or even a dozen years. We’re an impressive group with lots of sizzle, but smarter? So naive I can be.

We marketers lack the balls to sell or the intellect to create something. But we’re psychological masters of that odd space between creating (Beta tapes were good) and selling (VHS tapes were adopted), so we market!

Sure it's snake oil. We both know that. But isn't it fun to pretend it will solve all your problems and make you happy forever?!

And you’ll watch with amazement at our brilliance! Stand with mouths agape as we’re targeting important segments, generating unique consumer insights, identifying real and perceived value propositions, engaging and converting prospects, articulating benefits not features, and (of course) executing flawlessly. Yes you’ll watch our show like first-grade children enjoying their first magic show. Some will see our slight of hands, but all will leave with astonishment and wonder.

(Insert applause here)

* I made us the words in asterisks, and I hereby trademark them (c) Kevin Nalty 2010.

When I see my sweet AdAge pour more gas on the “Old-Spice goes viral” story, I feel like it’s time to remind my fellow marketers that they’ve got a better shot of developing (the shirtless actor) Isaiah Mustafa‘s abs than getting their TV or online-video spot viral.

Your man will never look like me, and your video will never go as viral.

This is another excellent example of the exception not the rule. Old-Spice’s dramatization is funny, slick, self-deprecating and memorable. Like other viral commercials, it stands out. It’s worthy of the 5 plus million views. But remember that people as obscure as me (nalts) with smaller audiences than me can fetch that each month. The one-hit wonder has given way to the webstars that are now building sustainable audiences, and they’ll promote your brand for less than it cost to groom Isaiah’s horse.

Now ask your friends and family to tell you the last time they sent or received a link to a commercial. Not your buds in the agency and marketing circles, but your friend next door that doesn’t understand what the hell you do for a living.

Television ads occasionally go viral, but viral is largely dead. We’re still seeing some twitches from the corpse, but the age of viral commercials will not see a resurgence. If you don’t believe me, read Beyond Viral when it comes out in a month or so (it’s already on Amazon, so I have bragging rights on that).

Maybe after a few more Benson & Hedges and my pension, I'll hear this damned machine's alarm. Wait, never mind. I sold my hearing aid for my third Scotch.

Now you read this, but like an elderly, smoking woman in Vegas, you’ll still play the odds. That’s fine. Just don’t bet the farm, eh? And hedge the bet- step away from the roulette table now and then and try the nickel slots.

In one of the more memorable moments of the incredibly quotable Stripes, a new recruit warns his fellow troupe: “The name’s Francis Sawyer… but everybody calls me psycho… any of you call me Francis I’ll kill you.” The drill sergeant’s response: “lighten up, Francis” (see video).

“Lighten up” was one of the pieces of advice in a column titled, “Four Ways to Protect Your Brand: Throw Away The Script.” The piece, written by former show-business executive Walter Sabo, reflects his learnings as CEO of Hitviews, a company that helps brands leverage online-video stars to produce sponsored videos that reach viewers in a different way than most online advertising.

It’s hard for a marketer to let go of his or her message, especially when the more a marketer cares about a brand the harder it is to see a promotion depart from a well-researched and carefully crafted strategy, message map, and creative brief.

I’d argue that “letting go” or “lightening up” is the second most difficult thing to do (followed almost certainly by gaining approval to engage in non-formatted promotion from conservative legal council and senior management less familiar with the medium). On this blog I’ve recounted my own experience with “giving up control” on social media. I preached it while at J&J but it became a lot more difficult when I saw my own brand (Propecia and “Nalts”) take on their own personalities online. In some cases both Propecia and “Nalts” (if I may call my online persona a brand) was inaccurate or at least incomplete. Fortunately Walter is not asking brands to depart from strategy, but to allow more creative control than we marketers typically afford agencies.

Indeed a video star is different from an agency’s director or producer. They have their own voice, and an audience that expects that voice to carry through entertainment and the occasional promotion. Have you ever heard a spot by Howard Stern? Give him too much copy or edit his script departures and you lose the impact of having him endorse the product — which sounds like an endorsement by a trusted personality.

I’m not familiar with many marketers who will enjoy being told to “lighten up,” but I trust that agencies can help educate their clients that a carefully controlled promotion is called an “advertisement” and is quite often tuned out. But webstars given some creative freedom to make the message their own is what breaks through the clutter.

Disclaimer: I am a “webstar” who has made videos for Hitviews on behalf of such clients as Reader’s Digest, Fox, MTV and Microsoft. One of my favorite aspects of this medium is trying to make widely-viewed videos that promote a brand but, above all, entertain. In most cases when a brand tampers in the creative, the views and persuasive power of the video is not as high. That doesn’t mean we “webstars” don’t need strategic direction and a creative brief… it just means that if we’re allowed to interpret it in our style for our audience the results are far more interesting.

(See 4/13 update below and learn the secret to connecting your Wireless keyboard to an Acer, which you won’t find after an hour on Windows help).

You loyal WVFF readers will know that I’ve been predicting the “killer web-to-television online video viewing” device for several years (here’s me wishing back in January 2007 and here’s my verbatim from 2010 predictions):

“I see a $199 device that allows us to access the Internet right from our televisions. It’s a small PC, a remote-controlled keyboard and mouse, and it plugs into any television via HDMI or even less progressive connections.”

We’re pretty dang close finally — here’s a device that would have eluded me due to minimal marketing. Thank goodness for Billy at Best Buy (his employer didn’t stock it, so I bought one at NewEgg.com). It’s an Acer AspireRevo AR3610-U9022 Desktop PC (Dark Blue), and here’s an Amazon affiliate link for it for $330 (I’ve yet to make a dime yet on the stupid affiliate program).

For about $300 you can watch Internet video on your high-definition television and control it with wireless keyboard

First the “reality check”: It’s not $199, but there is a cheaper version (called Revo) for that price. Note that the Revo is a bit dumbed down, lacks wireless remote and uses Windows XP. I chose the AspireRevo because it has a remote included, offers Windows 7, and has more horse power. You’ll also need an HDMI cable to connect it to your high-definition television, a TV with HDMI input, electricity, and (duh) a wireless router with high speed Internet. Essentially this is a decent computer without a monitor.

You can now enjoy online-video viewing (and other PC activities) right from your high-definition television. You heard me right. Your overpriced television is now a monitor, so you don’t have to chose between “lean forward” control or “lean back” comfort. “Oh, Kevin,” you say, “I’ve already been doing this for years with my PC.” Well shut up because you represent .005% of the population.

Yes, peeps… it’s convenient online-video viewing on YouTube and Hulu without the “walled garden” associated with most “convenience” devices like Roku, AppleTV, Netflix and Ethernet/wireless enabled BlueRay DVD players (yes I own those too, and they have some advantages like easy install, customized content, and easier navigation). But none of these allow Hulu (to my knowledge), or give you the full YouTube functionality. And some are slowwwww.

Here’s how you get this Revo thingy going (in case you’re even more techno-phobic than me):

1. You plug in the device to a source of electricity. Don’t get shocked.
2. You put said device next to your computer, and connect it to your TV with an HDMI cable (you can handle that, right?). The cable isn’t included. So if you don’t have one laying around, get a cheapo at BestBuy or online (or do better by by surfing CNet’s Cheapskate. Those cables can get wicked expensive, and I’m not convinced the primo ones are worth it.
3. You find a wireless signal (you do have a router that has high-speed Internet, right?). Hey, swipe your neighbors unless you live near me.
4. Now you sit your ass on your couch or bed and use the wireless keyboard and mouse to surf the web. Go full screen and suffer some commercials and you’re free at last. Free at last! You can enjoy Hulu like it’s television (albeit more grainy than you’d like, but free).

You can do basically the same thing with an old PC or laptop, but Billy tells me that video streams poorly on older processors. That explains why we haven’t seen my dream machine for $199 yet. But on the positive side, this puppy is more fueled than $350 Netbooks, and if you’re after web-video on the television it’s a better approach (some Netbooks have an HDMI output, but you’d need a long wire and I hate Netbook keyboards. Here are the specifications for this baby (note I haven’t test driven it yet):

• 1.6GHz Intel Atom 330 Processor
• 2GB DDR2 Memory
• 160GB 5400RPM SATA Hard Drive; Multi-in-1 Digital Media Card Reader
• Integrated NVIDIA ION Graphics; High-Definition Audio Support
• Windows 7 Home Premium (64-bit); Includes Wireless Keyboard and Mouse

This is more computer than I need, but a fast machine that runs Windows will come in handy since we’re all Mac, and the MacMini version of this would be twice as expensive (wireless keyboard sold separately, and Mac is cruel with accessory pricing… I just bought a damned backup power chord for my MacBook Pro for f’ing $80 from Billy).

*** Update 4/7: After hours of struggling with Windows 7 to connect the remote keyboard and mouse, I found the simple answer… by finding a brochure I missed in the packaging, seperate from the other materials. Seems there’s a dongle hiding in the mouse interiror that must be plugged into the Acer. Otherwise you’ll spend HOURS on Windows help and online, to no avail. All the other parts of the setup were less than 30 minutes, but finding the HDMI cable (hiding plugged into my television pretending to be connected to something) and the cursed wireless keyboard/remote HIDDEN DONGLE was very frustrating, however. I also would give Egghead a poor score on customer service. Ordered it for FedEx on Friday hoping for Saturday arrival, and paid $37 for that. Immediately after that, I read the fine print: several days to process. So “next day” doesn’t mean “next day,” and even worst the customer service rep (who took 10 minutes to acknowledge me and another 15 to reply) told me he’d try to cancel the FedEx charge… and he didn’t. No more Egghead purchases. Stick with Amazon.com.

That said, I’m blogging from the television set. You’d be surprised how well this keyboard is working even from 20 feet… but it’s hard to read this text, which from here is about equivalent to 4-point type). Off to try YouTube!

(Half the fun of this post is the hyperlinked videos to punctuate the copy).

Below is an ad from a trade magazine, where Yahoo let’s advertisers know their television ads can move online. My immediate reaction (after I puked and rinsed my vomit) was that Yahoo is basically teaching advertisers and brands to annoy its users. Not a good long-term strategy.

Hey, marketer. Hey, marketer. Hey, marketer. Send us your TV spots and money. Hey, marketer.

Then again, Yahoo has long shown it knows its REAL audience is not the silly fools who visit the site, but those that give it money. Yahoo has partnered with larger content providers, fetched large integrated advertising dollars like Fagin’s army of orphans, and countered You “animal farts” Tube with promises of advertising-safe content not user-generated content.

So Yahoo goes after the path of least resistance. It’s not an entirely reckless move. If you’re an online property and see the vast majority of marketing dollars going into television… why not be “an online television set”? It’s easier for marketers to understand, and for lazy media buyers to spend without a lot of work.

No seriously. Prerolls make me obsessed with brands.

Consider the mind of the marketer:

• My VP keeps asking me to shift dollars to online. I don’t want to hassle with a dumb ass branded Facebook page.
• Wait- I don’t have to spend hundreds of thousands of dollars customizing my content for the medium?
• I can just have my “Agency of Record” account lead tell his production people to send the Yahoo people a compressed version of our :30 and :60 spots?
• Then I shift some of my budget allocation? Sign me up. Yey prerolls!

Meanwhile, the consumer is silently skipping or indulging the ads with despise (even the dumbest online site won’t measure or share data on how prerolls have negative impact on brand sentiment). The hapless user/viewer is forced to watch television ads before and during the content they want. Suddenly they start drifting away from Yahoo, and looking for less obnoxious ways to get content and entertainment.

It’s a smart, strategic way to spur a shift of media dollars, even if it comes at the expense of Yahoo’s other target audience (the users and viewers).

Will it work? It might bring some fast revenue, but its sustainability requires a) the non-ad content being so incredible that Yahoo viewers tolerating this, and b) if Yahoo can use this approach as a buyer “hook,” then quickly adapts the ad content to make it engaging (something the ad promises, but is not as easy as repurposing television spots).

A more sustainable approach would be to partner with firms that can create “branded entertainment” (whatever that means to you), or set up rich media entertainment with non-intrusive but inviting ads (the Seven Echo model). But really… does Yahoo have the time or patience for that?

GE launched a health campaign today on YouTube that is part of trend toward softer advertising that, I believe, will have better long-term dividends even if it’s hard to measure.

GE is taking a lightly branded approach to promoting health and wellness by sponsoring a “Healthymagination” challenge among people on YouTube. There’s very subtle branding from GE, and no “drive to healthymagination.com” play. In fact the company is not trying to build a microsite, and is aggregating commissioned videos on Howcast’s YouTube channel. Now millions of people will watch and participate in health-challenge videos by iJustine, Alphacat, Rhett & Link, Smosh, me and other YouTube people with large followings.

This is about as far from an intrusive yet measurable pre-roll advertisement as you can get, but GE’s brand will now be associated with health — broadly across a number of demographics.

Okay I doctored this banner with the faces of YouTubers. But click to see real channel.

As someone participating in this health challenge, I am certainly biased. So let’s look instead at Pfizer’s YouTube homepage advertising “takeover” in January, which was centered around videos the company commissioned about health and fitness. The promoted brand (Chantix for smoking cessation) was present but not “in your face.” The insight that may have spawned this approach? Smokers aren’t exactly going to dive into a video channel about quitting.

In a current campaign with a similar “hands off” approach, Rhett and Link’s I Love Local Commercials campaign was sponsored by Microbilt. But the video series is a celebration of cheesy local ads for small business (Microbilt’s target). There’s no forced messages about how Microbilt offers credit, debt collection or background screening to small businesses. People can get excited about cheesy commercials or health (especially when a charity benefits). But it’s hard to get jazzed about debt collection, smoking cessation or light bulbs. It’s the same reason I used Mr. Complicated to promote Clear Point (who cares about staffing technology?).

Brian Bradley, MicroBilt’s EVP of Strategy & Emerging Markets, acknowledges it’s hard to put an ROI on programs like this (parenthetically I addressed this topic on Tuesday at a marketing conference, and here’s the deck).

“Although the initial work that lead to “I Love Local Commercials” was very spontaneous, it is part of a body of work at MicroBilt focused on building awareness and establishing thought leadership across market segments, ” Bradley told me via e-mail. “So that our traditional marketing and sales efforts are more successful.” Bradley said, for example, that if his sales people call a business prospect who hasn’t heard of MicroBilt, they can quickly find out it’s a real company.

It’s tempting for us marketers to force our brand so we can realize (or assume) a near-term ROI. But sometimes the most effective long-term strategy is to have a gentle presence while something bigger, more interesting, and more entertaining takes center stage. This is more instinctive to corporate communication or public-relations people, but they’re generally without budgets to sustain even small pilots like these.

The results may not show up in website visits, instant purchase, and awareness/recall studies. But I would argue that test/control or pre/post qualitative studies (while being cost prohibitive for these case studies), would indicate that target customers have higher favorability of these brands. I don’t think pre-rolls and banners could do that alone.

And isn’t that what separates the AIGs from the Disneys?

Last year my video roundup of the best Superbowl ads was seen more than 7 million times, so I kinda had to make a sequel. Since this year’s theme (for both aired videos and those banned) seemed to be about guys being gay or wearing underwear, it felt right to use “I Wear No Pants” (used in the Shazam Dockers ad and written by The Poxy Baggards).

Want to see how the ads were rated? Check out USAToday’s Ad Meter, see Advertising Age’s Report, or watch them all at YouTube’s AdBlitz channel.

I’ve got it! I’ve got it. YouTube and other online-video sites take notice. Free advice, peeps… to solve the ultimate online-video ad dilemma: pleasing advertisers without pissing off viewers.

Problem: We hate pre-rolls. Google says they work, but 75% of viewers drop like bodies on Fringe. We think we’re watching the wrong video, and most online-video content isn’t worth some 30-second ad. It may work for advertisers, but it’s far from user centric… It’s not a fair ratio. It’d be like being forced to watch 8 minutes of ads before your 22 minute television show (which you may or may not even like). Stats show that

Partial Solution: A smart first-step by YouTube. A split second of the video’s thumbnail shows up BEFORE the preroll. I noticed this for the first time while trying to figure out if CharlesTrippy is engaged or not. And whether ShayCarl is really moving. Anyone know? For those of you who don’t know them, you should know this. By doing daily vlogs they’ve captured a wild audience, and are constantly on top of the most-popular, best-rated YouTube videos. Trippy asked me if I’d consider the daily vlog, but honestly it’s so hard if you work full-time and my life isn’t as interesting as his. But I digress. I sense the 11 advertisers dropping off.

BETTER Solution: New format! a) Give us creators 10 seconds before the pre-roll hits (shall we call it a “Nalts mid-roll,” like my gut?). b) Then hit the 15-second ad. c) THEN on with the show. Viewers won’t adore it, but it will work better. Let me beta it on new videos, and I’ll cut my first 10 seconds with the knowledge that an ad may hit before second 11.

Why It Will Work: We creators now have 10 seconds to convince our audience that it’s worth waiting another 15 seconds for the rest of the “show.” The dropoff rate will be reduced dramatically. The advertiser is “in” the show, not blocking viewers.

Naturally this is not completely user centric. To be kind to viewers you turn off ads. But let’s keep it real here. As long as it’s free, it’s going to have ads. We viewers and we video creators generally don’t like ads. But if they’re effective, we marketers will subsidize the viewer’s experience (so we viewers don’t have to pay for content: so 1990). And we creators like making money. And we viewers don’t want to pay to see stuff. See?

The Online Ad Catch 22

Of course it’s like radar detectors and radars. As soon as the radar detectors get smart, the cops make better radars. Likewise, we get numb to ads, and many shut the InVideos reflexively (I watch my kids do this without realizing it). We stopped noticing the video ad on the top right of YouTube years ago, so now we have dancing ads all over 75 percent of the “above the fold.” It’s a bit much, and not very Googlesque. But the site’s trying to make a profit. Maybe now with Tim Armstrong gone it will change.

So, YouTube… Think about what fails:

Remember when iFilm used to be hot? Like Metacafe, they had pre-rolls but not for the first video you watched. Maybe one in 3 or 4. Once they’re on every damned video, we stop visiting the site completely. I won’t watch a trailer on Yahoo Video EVER because I was once interrupted by an ad to watch the movie advertisement. On the flip side, people liked Revver. But the post-roll ads were not often viewed.

And remember what is kind to the viewer and advertiser:

Hulu sometimes offers a choice of three ads. You can also choose to watch a movie trailer and watch an entire show without interruption. Or watch 30-seconds spread throughout. That’s good. Obviously we have to consider the ratio of ads to content, and hopefully the first video we watch is sans ad. Maybe prerolls (or mid-rolls) can show up later in one’s session, before longer and more valuable content.

How much do YouTube stars make each year? Oh for goodness sakes. Just like my same 5 YouTube videos (see right column of channel page here) represent the majority of my online views… It seems that most of WillVideoForFood’s blog traffic comes from people searching for how much YouTubers make.

We YouTube “Partners” (or “stars” as I hate saying) are all contractually forbidden to share our revenue. But I’ve given hints and clues over time. For those of you who Googled your way here, I’m both a marketer/advertiser and a creator/YouTuber, so that gives me two lenses into this Da Vinci-Code like mystery. Davinci made me think of “Da Bears.”

I’d estimate there are have at least a few dozen YouTube Partners earning $100K per year. That’s great money if you’re in your 20s or 30s and have minimal costs in production or overhead (like 4 kids and a horrific mortgage). But it’s a rounding error for a professional content creator or network.

To calculate a particular Parner’s income, here are some tips:

• You basically take the Partner’s total views for the month, multiply it by a fraction of a penny, and you have a rough idea. TubeMogul‘s Marketplace shows some of the most-viewed people (and their monthly views). But remember: the most-subscribed are not necessarily most-viewed and vice versa. YouTube doesn’t give a hoot how many subscribers you have (although that certainly helps drive views, but increasingly it seems less powerful than being a “related video”). In general, the commercial content is getting more daily views but the amateurs have a lock on subscribers.
• Most ads are placed by advertisers based on total 1K views, but some is on a per-click basis (CPC text ads placed by Google Adwords/Adsense). Google/YouTube is usually paid by an agency or media buyer a CPM (cost per thousand, say between $5 and $25 dollars per thousand views), then shares some of that with the creator. This can be highly misleading, because:
  • Some views earn nothing (if they’re embedded and no ad follows it).
  • And increasingly advertisers are paying a high premium for specific content they commission, target, or hand select. Sometimes this might average a few bucks and others it might be much higher… $25 CMP was the published rate of InVideo ads and I know of specific integrated campaigns that command a higher premium from YouTube. Yey!
• Another confounding variable: potty-mouthed creator turns away advertisers. So watch the ads on your Partner for a while. Are they premium InVideo ads with accompanying display (square) ads? Or are they garbage Adwords/Adsense ads?
• The text ads may SOMETIMES be paid on a per-click basis, which can make them fruitless or profitable depending on people clicking and buying the advertiser’s product (the latter must occur, or a savvy advertiser will quickly stop the campaign that’s raping them of click dollars and not generating business). I was telling my YouTube buds to turn these off because they’re ugly and don’t make much money, but a few of them gave me a stern stare like they knew otherwise. So whatever… maybe they make money and maybe they don’t. I don’t get a breakdown on them, and they’re still ugly.
• Then you have to factor in “sponsored videos,” where a YouTuber promotes a product or service for a flat fee (or variable based on views) via Hitviews or related companies. That can easily be more than YouTube shells out per month for ad sharing. The going rate here is incredibly wide: from $1K to $20K and higher per video.

So in conclusion:

1. Do your own math using monthly views on TubeMogul and assuming some CPM (cost per thousand), but recognize YouTube takes a cut and some of the advertising inventory isn’t sold or is driven by keyword Google adsense text thingies. Maybe the creator/partner gets a few bucks per thousand views and maybe more or less.
2. Use some of the assumptions above to calibrate your estimate if you’re trying to peak into the W-9s of your favorite “Stars” like Fred. There are now dozens of popular YouTube people that make a full-time living on YouTube revenue, and I’d guess a lot of $50K-$100K per year people. I am not among the full-timers. With a family of 6, I gotta have a day job too. But Shaycarl, Sxephil, Charles Trippy, Michael Buckley and many more… they’re full-time at this. If I was making the bucks I’m making via YouTube after college, I’d probably go full-time too. Fred? Let’s just say he’s got college covered, or a nice nest-egg.
3. Before you get excited (or jealous), it’s a long haul to cashville. And if you start with the hope of making money, you’re doomed. You need to LOVE it, and be extremely patient as the road to loads of views is tougher to climb, and requires an ass-load of persistence. Start as a hobby and “just keep swimming.”
4. Finally, there are two forces at odds that impact the sustainability of this revenue for YouTube amateurs. First, we’ll probably see continued competition from more professionally-produced content that fetches higher ad dollars because it feels safer to squeamish media buyers (see, I’m not calling them all dense anymore… only the ones that don’t read this vlog). But the good news is that dollars are projected to grow dramatically. Currently, as a marketer, I’d argue that YouTube is selling itself short.

How’s that? About as specific I can be without breaking my contract or confidence from my friends.

I know some of you peeps know more than I do, so feel free to comment below anonymously or not. Da bears.

Welcome WVFF Guest Blogger
Larry Kless

2009 proved the power of video and social media can change the world.

We experience the Presidential Inauguration with millions of friends on Facebook. We read breaking news stories from citizen journalists on Twitter. We saw live as-it-happens video on YouTube hours before the stories reached our televisions and the standard reports by traditional news agencies were read.

More than any other year 2009 saw the rise of video as one of the most effective communication mediums in world history.

Virtually, every aspect of video is now included in business. From concept, scripting, storyboards, production, editing, encoding, storing, managing, distributing, syndicating, tracking, analyzing, etc… Content producers, media companies, small and medium-sized business all have the same opportunities to build their business and become online video publishers like any major corporation.

2009 also saw a shift in how we do business, from the personal to the virtual, in boardrooms, in our living rooms and especially,  from our mobile devices; which will soon do everything and anything we can imagine.

The stresses of the 2008 economy saw businesses cut their travel budgets, so it was no surprise that after more than 20 years videoconferencing found its resurgence as, “the next big thing” and video became the vehicle for our conversation.

TelePresence became a household word. Powered by Cisco TelePresence Solutions nonstop marketing efforts, IP video chat, WebConferencing, collaboration and live video streaming moved to the forefront as many businesses and media companies looked for ways to connect people and their team members to broaden consumer markets and publishing.

In 2010 I predict the most important area for video marketing and publishing will be the value video brings to the rate of return, ROI. Analytics will be big! It is how we measure and track performance, but it’s not going to be just about numbers, it’s going to be about engagement and reach.

Since “views” is what ultimately drives revenue we will see the emergence and demand for a standardization metric in both the industry and in business. We will also see an increase in social media metrics focused on search, discovery and optimization.

It is no longer enough for companies to deploy video solutions, business will need to engage in the communities where their audiences are through a variety of social networks. Conversation tools like Facebook, Twitter, YouTube will help marketers extend their reach and promote their brands.

Video is now part of the strategy within the ecosystem of marketing, and not just part of online marketing, but it must be part of everyone’s overall business plan.

Finally, in 2010 we will see more focus on high quality content, storytelling and a Smart Video Business Model (SVBM) will emerge to help foster that growth.

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