Online-Video Marketing for Small Businesses

How can a small company take advantage of this bountiful new online-video market? They can personalize their offering, increase reach, optimize search-engine rankings, and target with greater precision. While few startups will “go viral,” entrepreneurs have a competitive advantage in their flexibility and agility. Without large bureaucracies or expensive agencies, a smaller business can leave out the nonsense and get their message out via the less crowded medium.

I have not yet found a way to profitably help small businesses take advantage of online video. As an entrepreneur I couldn’t justify my own fees to a startup. So that’s one of the primary purposes of writing “Beyond Viral,” and in sharing secrets with whatever journalist comes my way… last month it was Entrepreneur magazine and “Rise to the Top,” and now it’s AOL Small Business.

AOL Small Business writer Lauren Drell does a nice job of providing some key insights and recommendations for smaller businesses. Check out her 5 things you need to know… because you do.

Beyond Viral (go buy it at Amazon) has a chapter devoted specifically to small businesses, although most of the entire book is applicable. The secret trick is to stop thinking about a specific funny, viral video… and engage the medium strategically. Finding where your audience is, what will get their attention, and how to compel the right ones to consider purchase or trial. It’s not brain surgery, but it’s easy to waste time or money.

Online-Video Ad Growth for 2011 (Research): TV Budgets in Play?

Online-video advertising spending looks to be growing again in 2011, even after an impressive 40% growth from 2009 to 2010. Media buyers surveyed by Deutsche Bank “Internet Industry Outlook” report (Jan. 18, 2010, see PDF). To fund online-video spending, many predict to cannibalize display advertising and some expect to move as much as 5% of television budgets.

“Video advertising will be the online ad format with the most growth momentum over the coming years,” comments Vincent Bonneau, Director of the Internet Business Unit at IDATE (source: UTalk).

Why? It’s not for the “higher engagement” reasons that we’d expect: Media buyers cite less clutter, better targeting, more professional content available, and lower cost of production (relative to television). Indeed I’ve seen many CPG brands commissioning video production for web, and at costs approximating 30% of what they’re spending for television commercials.

The audience of online video, of course, continues to grow. In November about 172 million viewers consumed 35 billion videos in more than 5 billion sessions.

Online video, next to social and mobile, appears to be growing faster than most digital advertising

What’s YouTube’s Profit?

While Google keeps YouTube revenue under wraps, it claimed recently to have doubled in 2010 relative to 2011. Christopher Rick (ReelSEO) is estimating its revenue in 2011 at $2 billion based on a Citigroup report (predicting $1.1 billion) and some solid or maybe conservative assumptions (using an adjusted CPM and not including homepage takeover programs). With online advertising spending reaching $28.5 billion, it seems reasonable to expect YouTube to fetch at least 3 percent of it given the deep relationships between Google and advertisers. If Google/YouTube paid more attention to media buying agencies, $2 billion would be a layup. Instead, I’d predict Facebook to be the beneficiary of dollars otherwise going to the world’s largest video platform. YouTube is, however, benefiting from both premium ad buys (minority) and targeted ads purchased via Adsense.

eMarketer, like Deutsch, reports double-digit percent growth for online advertising overall, and it’s poised to overtake newspaper advertising spending in 2011.

Online advertising spending, overall, is growing in healthy double digits

Digital Spending Versus Offline

What strikes me as particularly interesting is that online advertising (as it surpasses $30 billion) is not just overtaking print (newspaper), but becoming a larger and larger percent of the overall advertising mix. Online ad spending was, just years ago, a paltry 3-5 percent of the marketing budget. Now it’s well into double digit percents (see Deutsche graphic below). This could change more dramatically if media buyers move even small portions of those bloated television budgets to fuel online-video advertising.

Online ad spending is becoming a larger percent of offline ad budgets

Will online-video dip into those beefy television budgets? I think it will this year, but much more so in 2012 as advertisers become comfortable with the medium and viewing becomes increasingly easier and mainstream.

Consumption Changes

Online-video used to be the workplace escape. But we’re seeing those Wednesday online-video view dips, and stronger weekend views (see Tubemogul/Brightcove report), as people become more comfortable watching content on web-TV devices and gaming consoles. We’re also seeing broadband subscriptions grow to 500 million.

Online-video is converging with the large screen we call HDTV (devices are proliferating and long form consumption is on the rise), the medium will benefit more naturally from the far heftier and less scrutinized television budgets. Just remember, kids. IAB said to keep it “mature.”

Online-Video & Entrepreneurship

If you’re an entrepreneur interested in the Internet marketing and online-video, you’ll want pick up “Smarter, Faster and Cheaper,” which is a refreshing take on the space by mini-maven David Garland. My first impression of Garland, a fellow Wiley author, was jaded by his “as seen on ABC” logo and cheesy pocket hanky. I thought he might be one of those multi-level marketers or “get rich quick” dudes, who suck you into a spam vortex and start pimping eBooks. But we love ya anyway, Joel Comm. And congrats on the weight loss!

Anyway, oh contraire on that first impression. During our 1-hour chat before this interview (see The Rise To the Top) I discovered he’s quite a likable chat. He also told me I was harder to pin down then the celebrity authors who endorsed his book, which was a sad reminder I need a virtual assistant.

Check out Garland, and enjoy this little interview. It’s worth the click. I’d embed it here, but the mini maven deserves some more traffic, even if he’s got loads.

David Garland interviewing Nalts, who lacks the pocket handkerchief but does the best he can.

If This is the Ad, Don’t Let the Show Return (Intel Chase Scene)

Here’s a top “viral” video that is indeed viral, and indeed an ad (2nd Generation Intel® Core™ i5 processor).

While it hasn’t met the strict definition I use (4 million within 24-48 characteristic of that Golden Voice homeless man), the Intel “Chase Scene” is past 813,000 views, and I believe it will continue to grow. Why? No blatant pitch; just great creative.

It’s got the pace of a John Woo film, depicts Matrox-like transformations from various web experiences. Our protagonist female spy darts from Facebook to video games, and even across mundane experiences like desktops and Microsoft business applications. Most importantly, the “short film” features kick ass music and a brunette on the run from a bunch of dangerous but outwitted thugs. Whether she’s diving from a building, racing in a car, or “deleting” them…. she’s got that Angeline Jolie Salt mojo, with a dash of MysteryGuitarMan imagination.

In one of the rapid-fire getaway moments, our hero dashes from a video player into a nearby getaway car... in an adjacent banner ad.

The good news, advertisers… if your “viral” clips are this good, you don’t have to buy their way to our attention via “spots” and “prerolls” (though that “one-two punch” didn’t hurt Old Spice). The bad news… Jackie Chan makes stunts look easy, but you might be too old for his moves. Even he might be too old for his moves.

WATCH The Future of Web-TV Emerge Before Your Eyes

The "coalition of the willing" of online video has been assembled

It took hours, but I’ve compiled the definitive Twitter list of those hungry for web-tv and online video. In once click, you can follow reporters, CEOs, new-media gurus, events, groups, authors, techies, potentially some annoying vendors, select creators, speakers, experts… and, well, even me.

It is, dear reader and confident, “The Coalition of the Willing” of online video.

They Cambridge “Who’s Who” of the video revolution is talking about and shaping things like time-shifted DVRs, hidebound MSOs, PayTV’s adapting, Sandy Bridge, Honeycombs (yeah), clouds, BestBuy, video portals, more clouds, video search (SEO), Slings, Netflix, Roku, iTV, Jinni, Clicker, Boxee, YouTube, video trends, user adoption, mobile video, web-TV, Videoscope, Xoom, CES, TV Everywhere, viral video, 2011 predictions, and other exciting dynamics of the unique time we’re in.

There are 350 million web-enabled TV devices projected to be sold by 2015 (source). That’s a whole lot of puddin’.

You may chose to follow the online-video coalition of the willing. Or you may wish to ignore this list, swing your head away from the accident, and wait to be surprised. But it’s going to happen whether you’re watching or not. It is happening. Toss your Blueray DVDs in a garage-sale bin, and buckle up for a ride.

Some of these hand-picked, platinum-covered cyber-humans are twitter-thorities sitting in their basements and offices 24-7, thinking about and building a future where video… Where video, damnit, dances majestically from laptop to smart phone to HDTVs. Where it’s not free, but it roams freely. Where crap and great live together in perfect harmony.

And some of these moving-picture “future builders” remain so dedicated to the cause they’re immune to nearly anything that spews from the archaic “television machines” you caveman use. Like AskANinja co-founder Kent Nichols, who just tweeted: “First time I’ve listened to the news live in a while. Amazing what a bubble that the web and DVR is.”

Oh it’s a bubble, alright, Mr. Nichols. And when it bursts, your brain’s going to explode right out of your f’ing skull.

askaninja kent nichols profile

Solutions to “Free” vs “Paid” Debate About Online Video

Our friends at ReelSEO revealed the Pew data showing viewer’s surprising willingness to pay for online-video content. Until recently, I’ve been nervous about the notion of any subscription or pay-per-view model because it’s likely a “deal killer” for most viewers watching amateur creators. Sure I’ll pay to license/buy The Guild or Dr. Horrible, but less so for vloggers and amateurs (love ya, Charles Trippy, but “Internet Killed Television” is working quite well as free).

I’ve long maintained that the marketplace depended on advertising revenue since YouTube viewers are accustomed to free content. I believe the vast majority would protest a fee-based model — whether a token “pay-per-view” or modest subscription charge. Still, some would pay to avoid ads and access “extras.” But let’s try to avoid the dreaded but inevitable “one-two-punch” models ($7.99 Hulu plus– where the “plus” stands for ads) that subject viewers to both a subscription and advertisements. I’m still sometimes perplexed why I pay for CableTV and get subjected to advertisements. Then again, it worked with magazine subscriptions.

Note: this post is me sculpting fog, and is subject to errors in logic. I hope you’ll comment so we viewers (and advertisers) can “crowd source” a solution.

Paywall of Doom (click for source)

A solution to the free vs. paid debate can be simple to the viewer, but certainly has nuances. The trick is that the model can’t be black or white, or binary. We need to provide viewers with options based on the proven success of “freemium” in software. “Freemium” refers to a trial version with limited functionality that is free, coupled with a paid premium offering (usually offering more stuff we value) that sustains the provider’s economic needs. This differs from the loathed “paywall” model that suddenly restricts content access to paying subscribers, a model that would certainly flop in the democratic and entitlement era of YouTube. Here’s what I propose:

  1. FREE CONTINUES: Maintain free content for everyone with pre-rolls, Invids, banners, and Ding-Dong Fat Mamas (I made that last one up, but it’s not far from real terms like “takeovers” and “Fat Boys“).
  2. PAY MODEST FEE TO ENJOY “AD-FREE” VIEWING: If the ads become intrusive, the viewer could chose to “opt out” 0f ads by paying a token fee (but volatile and difficult to preemptively set). A small fee today could easily offset the majority of paltry per-view payments that YouTube and the Partners receive from advertisers. The ad prices are now artificially low since the medium is new, and the media market hasn’t yet realized video’s impact. The problem, of course, is that fee is based on the advertisers perceived value of the particular audience. But common… if CableTV figured it out, so too should Google.
  3. VIEWERS SUBSCRIBE BY VOLUME?: It would be difficult to offer a “subscription” fee at a channel-by-channel level. So this might better work as a comprehensive volume-based subscription. I imagine few Partners would have much luck creating an individual channel paywall. I’m one of a growing number of viewers, however, who would rather pay a few pennies for preroll-free videos and temporary “advertising immunity”… Those repetitive, unstoppable prerolls are what I find especially intrusive. In a great act of hypocrisy, I reluctantly subject my viewers to them because they’re far more profitable than InVid ads or penny-auction surrounding banners. To keep the solution fair, the user might purchase a bulk number of ad-free views in a beta (sufficient for a month’s worth of views, for instance) and continue if they wish.
  4. PAYWALL WITH EXTRAS: Another model, albiet more complex, would offer subscribers additional “value adds” such as higher quality content, earlier release dates, or “extras.” This undertaking would depend on the percentage of the audience that would be willing to pay, and that segment that would certainly be small at first (thus decreasing creator motivation to produce extras). While I can’t envision more than 5 percent of YouTube viewers currently opting to pay, it might qualify them as “super viewers,” and I’d expect most YouTube Partners and YouTube to find ways to reward them fairly as VIPs.

The reason YouTube and other platforms ought to experiment with these models is that this: The noble attempt to earn money to encourage more creators and generate site profitability is, I believe, beginning to create “audience fatigue.” These ads are, currently, generating only a fraction of what preroll ads are likely worth. They’re also diminishing in value to brands if the frequency gets excessive per viewer. So I encourage YouTube or a smaller site to conduct a trial with viewers — giving them a choice, and ensuring that the “holdouts” don’t feel unfairly deprived (for instance by having their video quality diminished from what they’ve grown accustomed).

A few tips, since this hasn’t been with success in web video yet (for some valid reasons):

  • This would have to be done carefully. As I mentioned, it would also be difficult for a viewer to select what “channels” to which they’d pay to subscribe sans ads– due to the varying individual tastes of viewers and the volatile quality/style/frequency of YouTube Partners. Unlike the relationship between network shows and fans, these relationships are less predictable. We also don’t want to create an awkward hierarchy among Partners (especially in a community forged with democracy and sharing). Again, if only one group (TheStation) created a perceived or real paywall, it would go over like a fart in church. Viewers resented when the comedic duo, Smosh, started moving viewers to Live Universe (alive?).
  • The most practical and turnkey approach would involve a website (YouTube) allowing viewers a generous monthly number of ad-free views to those who paid a very modest flat fee. I acknowledge that the “devil is in the details.” The worth of an ad-free view varies tremendously based on the perceived value of the Partner’s audience to an advertiser. Due to advertiser’s particular desire for certain demographics (not content, or your perceived quality of it), a view of ShaneDawson or Annoying Orange might command a radically lower CPM or CPC than, say, Mediocrefilms or Blame Society. So a pricing model would be difficult to set based on the viewer. I may be stretching here, but there’s a potential “self healing” solution: presumably wealthier, affluent individuals are worth more to advertisers (and perhaps more prone to paying). Teenagers can sometimes be worth less at a CPM, so they’d pay less or just suffer the ads. Yes I realize we’d all change our YouTube profile age to “born 1989” to “game the system,” but Google owns Doubleclick, kids. Don’t think it doesn’t know what you had for breakfast.
  • Finally, it would have to be as easy as buying a show via AppleTV or iTunes. If I’ve got to remember my Paypal and input a credit card, my price sensitivity changes drastically.

Thoughts? How much would you pay to skip a pre-roll or avoid them completely? Or have you grown immune to their presence? What if suddenly advertisers wanted to pay more than you would to avoid them? How would you propose YouTube and other platforms adjust to balance the needs of two important constituents: we viewers and the brands seeking our hearts and wallets?

Survey of “Business People” Substantiates Online Video

Well, he’s not crazy after all. Online video works even for the top brass it seems. A Forbest Insight study reported by eMarketer shows that online video actually has some business application… even in the coveted “C” suite (CEO, CMO, CFO and CIO). That last one stands for “career is over.” (Wait for laughter).

Rich, white executives like online video too!

Some important “take aways” based on the Forbes/Google survey of 300 c-level and executive leaders:

  • More than 80% said they were watching more online video today than last year
  • Nearly 60% of all respondents said they would watch video before reading text on the same webpage (but give them a choice please)
  • 22% said they generally liked watching video more than reading text for reviewing business information
  • Three-quarters of all executives said they watched work-related videos on business websites at least once a week, and more than half did the same on YouTube.
  • A stunning 65% have visited a vendor’s website after watching the video (but that doesn’t mean that they do so 65% of the time they see a video)
  • It is not clear how many of them have heard of “Annoying Orange” or “Fred.” The research wasn’t conclusive on that.

Before we get too excited, let’s recognize that they still prefer text for business information:

Text still leads, but offering them a choice appears "no brainer"

The biggest surprise to me? They’re surprisingly receptive to longer videos (about half said 3-5 minutes was cool)

47% of executives said 3 to 5 minutes is acceptable length according to Forbes/Google

Finally check out what they did after watching the video? Appears online video moved them down the purchase path.

This eMarketer graph shows that executives took action after watching videos.

So run along now and tell your boss, please. The online-video space needs more legitimization, and you can put this man to work.

Is Google Squandering YouTube’s Potential? Yes, So…

“YouTube’s future is being held back is the typical innovator’s dilemma, or rather, billionaire’s dilemma,” writesAshkan Karbasfrooshan is CEO of WatchMojo.com. I included some of Karbashfrooshan’s pieces in Beyond Viral, and he’s one of the authoritative writers about the online-video industry and media monetization.

Google's Mansion and its YouTube Slave House

Indeed YouTube is but a toy kiosk in the Google “Mall of Americas.” Before I provide my 2 cents, here are some important highlights of his recent piece (with my comments in italics). His article was spawned, in part, by a “Video Forecast 2011” piece by AlphaBird’s Alex Rowland.

  • Google is generating way too much money from its “traditional” search business ($30 billion) to care about radically owning the new video space (which is a small portion of the $2.5 billion Google counts as “display”).
  • While YouTube commands 45% of the video streams in the U.S., it is unlikely that it will generate $600 million from video ads in 2010 (or 40% x $1.5 billion). (Hulu, he says, did $240 million… and with a tiny percentage of streams).
  • YouTube correctly identified ad agencies and Fortune 500 marketers as those who would turn YouTube into a billion-dollar business.   However, since Google had little experience in selling to ad agencies before it acquired YouTube, growing video revenues took a lot of time to scale.
  • But instead of allowing content partners set prices based on actual market dynamics (demand and supply), YouTube implemented a set of obstacles and requirements that have made selling one’s YouTube channel all but impossible. YouTube did this, I believe, in an attempt to thwart content producers from owning the relationships with media planners and buyers.  After all, if YouTube opened up its site, it would lose contact with advertisers and become a mere dumb pipe. (Indeed Google has been known to dismiss the role of the media buyer as somewhat useless intermediary… however the “dumb pipe” of Google’s paid-search network isn’t so dumb).
  • Some would argue that if leading YouTube content provider Next New Networks’ indeed sold to YouTube (a rumor that spread in recent weeks, such as with this LA Times piece), it would be more of a capitulation than coup, for NNN relies so much on YouTube that it cannot possibly remain a going concern if it was not part of YouTube.

Now the WatchMojo CEO is a YouTube content provider, and has reduced the percentage of his company’s own inventory via YouTube from 45% to 15% in just the last past few months (by expanding his distribution beyond YouTube, since his YouTube audience has not contracted). He says YouTube is creating an “opening for others to win the bigger ad dollars,” and names DailyMotion, Metacafe and Facebook as potentials.

Now my thoughts: this isn’t a lone voice. I’ve heard this or similar perspective from content creators, advertising agencies, industry watch dogs and even some variations from YouTube/Google employees.

I would contend that Karbasfrooshan is more correct than controversial, and that Google is perhaps even “strategically ignoring” online-video’s near-term growth potential because it has far more critical business “levers.”

  • Google has a cash cow in search-engine advertising, and is broadening into other mediums especially mobile. I expect YouTube’s growth to continue (it’s usually the case with the market leader), but its share of online-video display dollars will decline dramatically.
  • Still, YouTube will continue to flourish via the middle market, lower maintenance, and “self serve” portion of the marketplace. This is almost certain without a significant “course correction” that does not appear imminent or within Google’s DNA.
  • If Facebook begins to display video and share advertising revenue with content creators, I would imagine most — from Discovery to Annoying Orange — would start posting on Facebook quickly, migrating their audience, and even staggering/delaying content to YouTube (the way some providers like The Onion and College Humor do… first posting on their own sites, then weeks later posting on YouTube).
  • Just as I don’t think my own content cannot survive and flourish outside YouTube (at least alone, hence my signing with Next New Networks), I do not believe Google is poised to grow or even maintain YouTube’s share of the online-video advertising budgets even remotely in relationship to its percent of video streams.
  • The exception will be small companies and middle markets, or advertisers who are prone to buying via Adwords. Currently the vast majority of YouTube advertising dollars (with the exception of individual campaigns and homepage takeovers) are almost entirely driven by Adsense Adwords. You heard me correctly, and that’s a sad statement about Google/YouTube’s ability to sell direct to brands and/or via partners and agencies.

Large content creators and brands will and should want a strong platform partner which puts the audience needs and preferences first, but theirs at a close second.

So the answer to this post’s title is “yes… Google is squandering YouTube’s potential right now.” It is almost inarguable truth that YouTube is not leveraging the strength of Google and its global salesforce, and not winning the hearts and minds of Madison Avenue. It follows, therefore, that the stewards of large digital media budgets are now seeking — and will continue to pursue — alternative online-video advertising options for innovative programs beyond prerolls.

I’d expect to see AOL and Yahoo, if not Facebook, knipping away at Google’s online-video Achilles heal. Google, after all, is not a media property at heart… it’s a sleuth of engineers producing innovative change. Given that identity, Google can’t be underestimated as a bold market force that will continue to shake the online-video industry in ways far more interesting than hundred-million-dollar media buys, which are akin to vending-machine revenue at a casino.

In the meantime, content creators should:

  • Ask YouTube to facilitate and encourage them to prevent agency buyers from feeling YouTube’s thorns. Likewise they need to aggregate to achieve sufficient strength to command the interest of digital buyers unless their niche is remarkable.
  • Maintain good relationships with YouTube people, recognizing that many of YouTube’s shortcomings are out of their control.
  • Diversify their distribution to include some of the smaller properties… especially those that grow. YouTube’s incentive to innovate for advertisers depends on market competition.
  • Derive income directly via sponsorships… which is no longer discouraged by YouTube, a video platform.
  • Pay close attention to what Google is doing with online video that has far greater potential than YouTube or any individual media property alone.

Starving Artists Take Note: Video > T-shirts

A child peddling a light was the $10K winner that brought Poptent past the $1 million mark

I was happy to hear Threadless founder and former CEO Jake Nickell on public radio’s “Markeplace” tonight, and how he was “crowdsourcing” in Threadless’ decade of business… even before there was a name for it. “Last year we paid over $1.5 million out to artists,” he told interviewer Kai Ryssdal. Designers upload their creations, and the community votes for the best… which are produced and sold with artists getting a $2K cash prize, $500K in a gift certificate, and royalties.

Then I compared it to today’s news. Philadelphia-based Poptent (www.poptent.net), which crowdsources video production for large and mid-sized brands, has given out $1 million in cash payments. That’s certainly a first for online video, and considering in no doubt went to a small sub-segment of the 20,000 Poptent videographers, it’s a pretty good sign for the online-video creator community. The million-dollar man was hit by Sean Cunningham, a NY-based freelance videographer who received $10,000 for creating this video as part of GE’s “Tag Your Green” ecomagination campaign. Disclaimer: I worked with Poptent when it was Xlntads, and also participated in the GE campaign as a YouTube creator.

It’s a wonderfully inspired “amateur” creation that could easily fit as a broadcast television ad. Community comments on the video are positive, even if some might have been from competitors. Cunningham has been a member of Poptent since October 2008 and participated in previous Poptent assignments for Becks Beer, eHealth, and Snickers.  All four of the crowdsourced GE videos can be viewed here.

What’s even more encouraging? The assignment came not directly but via a major agency’s digital arm (OMD). That tells me the market is finally understanding that while agencies won’t soon lose their seat at the creative and strategy table, there are lots of Cunninghams with bright ideas. Even if it took six versions (see screen shot).

YouTube Plus “Next New Network” Equals “Huh?”

First- the disclaimers. I share in advertising revenue from YouTube. And I’m a content partner for Next New Networks, but not an employee or quite the size of these guys. I’m just some marketing clown with a video camera, no writing staff, but 175 million views. Big deal. My blog’s still ugly.

YouTube Rumored to Be Buying Next New Networks... Perplexing But Interesting

So I’m not privileged to any discussions between YouTube and Next New Networks, and know nothing more about the alleged acquisition than I’ve read here. While I have been aware of rumors of someone acquiring NNN for a couple months, I didn’t even seriously consider the possibility that Google/YouTube would buy it. So it was fresh news to me when I got a text from ZackScott today (he wanted to brag about his recent GoogleTV gift, and how he’s become a bigger sellout than me).

My thoughts on the potential of a deal. First, “Why It Makes Little Sense At First Glance”

  • YouTube took Google far out of its core competency (from search machine to platform)… Next New Networks is another dangerous stretch. A real stretch. I worked for an Internet agency that was accidentally purchased by a telecommunication firm. That kind of stretch.

I can only imagine some of the conversations between the right-coast, roight brained NNN gang and the left-coast, left-brained engineers. It could be like a toaster trying to talk to a boom box.

  • YouTube already has deals with many content creators, so I’m not sure what it’s getting beyond some bright leadership, a library of content to monetize in new ways, and some production/marketing experience.
  • The relationship is strong between YouTube and NNN, so how is this strategic enough to offset the perceptions that Google is now encroaching on the content space? Could this send the networks a signal that Google is now a competitor to networks and studios?

Why It Makes Great Sense

  • I’ve written before that Madison doesn’t like YouTube (click to read “How Madison Avenue is Killing YouTube“). And there needs to be a buffer between creators and agencies. NNN could play a valuable role in buffering agencies from touching the YouTube rose’s engineering thorns… if YouTube/Google allowed it.
  • The control of NNN content will give YouTube a sandbox to try new content-delivery models via phone, television and mobile. It’s a sandbox but with real humans.
  • There’s a name for this. It’s called vertical integration, and it can be healthy as long as it’s not creating a monopoly (which clearly isn’t the case here).  Owning a network can help YouTube engage with other networks more effectively. A simpler example: if I run a line of beauty products, its worth owning one salon… I get real-world experience that rivals laboratory R&D, and it can inform my products.
  • This provides YouTube a presence on the East Coast (where most of the budgets originate) that is more meaningful than a sales office. Sponsored content, I believe, will be bi-coastal.
  • It could be a step toward better content partnerships. CEO Fred Seibert is a producer of some of Cartoon Networks greatest shows, and a former MTV creative director. So he’s got some clout in the entertainment world that can make/break YouTube. Having network experience inside Google will help Google be less aggressive with the advertisers YouTube needs to court. Oh, and by the way… NNN is one of the few web studios that has endured the implosion of the “New Establishment” (the name I used in my book to refer to emerging studios).

I think I sufficiently hedged this post so that I retain rights to say “I told you so” if this deal is a great success, and hires me… or if it flops insanely.

What do you think? Or don’t you care? See this is my  problem… when amazing news like this breaks, nobody in my IRL circle cares. Folks at my client and in my family don’t give a rats ass, so I need to work it out here.