How & Why Madison Avenue Is Killing YouTube (and what it can do)

Call it a subtle scent at this week’s Ad:Tech in NYC… Lots of discussion of online-video, even if not in proportion to online-video’s growing importance to the online-marketing mix. More interesting, however, is that most conversations didn’t use the two words: “you” and “tube.” People talked about contextual targeting, video-advertising networks, and even facial recognition.

Even though every attendee received a free Fast Company that featured YouTube influencers, the words “You” and “Tube” weren’t muttered except in disgust. Even Google’s mainstream booth didn’t showcase YouTube. WTF?

Why? How was it that people would only discuss YouTube when I brought it up? And why was all the feedback negative:

  • They’re not selling inventory well. They’re not even making it easy for us to buy it.
  • They don’t understand the role of the agency because they’re used to getting money through electronic bids.
  • YouTube sees agencies as unimportant middlemen between them and THEIR customers
  • If you don’t have $40 million, they won’t customize things for you.

The “Madison YouTube Snub” wasn’t about the proximity of ads to “consumer generated content,” or about metrics or targeting. It was simply that agency buyers (as haughty as I know they can be) aren’t being treated well.

What YouTube is missing is the “Great Irrationality of Marketing Spending,” something I’ve grown to understand even if I disdain. I’ve seen it closely from all three perspectives: as a content creator, a buyer, and an intermediary. While we direct-response oriented marketers (the ones who track A/B campaigns on Google OCD style) are about results, the vast majority of advertising spending is not rational or performance driven. There. I said it. Try to refute that fact.

I’m not suggesting that media buyers are behaving recklessly or spending without consideration of their client’s money. But I do know that when confronted with a new medium with unclear metrics, they buy based on a) what’s easy, b) what they understand, and c) relationships.

I know how devalued my 4-6 million monthly views on YouTube are, and how the cost-per-view is horrifically low. So this article is a bit biased. But I also know I can’t solve that myself… it’s going to take some improvements in San Bruno. I would typically provide this advise without public fanfare as “not to bite the hand that feeds me.” I wouldn’t have an audience without YouTube. But I owe it to myself and fellow creators to help YouTube solve its biggest problem: poor monetization of traffic.

So here are 7  tips for YouTube to win back the hearts and dollars of Madison Avenue.

  1. Be Nice. You don’t have to contort your business model to fit advertisers, but at least show them love.
  2. Know Your Customer. It’s only partially true that the big brands are your customer, Google. Don’t negate the influence of the agencies on how that spending is partitioned. Even the smartest and well-intentioned marketers defer to media buyers. Marketer have two years to chase ROI and can’t possibly get into the weeds of one medium — much less one property.
  3. Teach Google sales people about YouTube. They simply don’t understand how to sell display advertising, much less video. It’s really quite sad.
  4. Educate. As market leader, it’s Google’s responsibility to set metrics, validate the medium, and educate buyers AND key influencers. Don’t expect logic to prevail, or it will be 2012 and Madison will have jacked up competitors. If I don’t see some ROI studies in 2011 published by YouTube and Forrester, ComScore, TubeMogul, Jupiter, eMarketer, or whoever… I’m going to show up to San Bruno with poop on a stick.
  5. Create an East Coast sales office for YouTube. Do it now. YouTube is floundering in silly pods, and there’s not enough pretty faces greasing agency palms. I resent it too, but it’s how dollars flow.
  6. Decentralize. Agencies do a lot of stupid things, but they know the importance of small. Google is too layered to move in the agile way that’s required of new media, and it’s killing itself.
  7. Get Creative. You don’t need to accept ad units that piss of your viewers, which is a more important stakeholder than advertisers. But explore new options, partner with greater trust, and don’t expect video to be monetized with the simple standards of your cash cow (paid search).

Any other tips? Or are you just gonna hope it takes care of itself?

Why Squeegees Is Hysterical and ABC’s Financial Quagmire

The New York Times writes another “web video is a losing proposition” article, and boasts countless of examples of overbaked web series that lost their shirts. I think Squeegees is a perfect example of the problem with online video and monetization. Writes Brian Stelter:

“Squeegees,” a 10-episode series by Stage 9 (a digital subsidiary of ABC) about a merry band of high-rise window washers, illustrates the challenge. The show made its premiere in April on five Web sites. On the most prominent site, YouTube, the second episode showed 312,000 views as of Sunday, helped by prominent links on YouTube’s home page in April. By the fifth episode, the view count had dropped to 3,000.

Squeegees is absolutely hysterical (see them on YouTube). I learned of it for the first time last Friday from a friend, and we watched nearly ever episode. It’s well written, well acted, and reminds me of Stella (a short-lived modern 3 Stooges, staring the brilliant Michael Ian Black).

But it’s perhaps “too television like” for the early, habitual adopters of online video. It’s brilliant comedy but simply doesn’t currently appeal to online-video viewers that engage daily with YouTube. Will the mainstream viewers prefer Squeegees to Nalts? Absolutely. But that’s going to take time, and even Eisner can’t afford to float expensive production until a monetization model appears in the next few years (driven mostly by ads, and subsidized by pay-per-view if it’s easy enough and offers additional value).

Squeegees has about 1,500 subscribers on YouTube despite uploading 6 months ago (admitedly YouTube is not a primary channel for the content, and here are the rest of the distribution channels for the web series).

But remember that YouTube is the most popular online-video site, and the default residence for regular consumers of online video. For now (with an emphasis on NOW), I’d rather be the 80th most popular YouTuber than the King of Hulu. I’ve gained more subscribers in the past 24 hours than Squeegees has since it launched. Am I better? No. But I market myself, appeal better to current obsessive online viewers, and I probably spend less per episode than Squeegees spent to cater breakfast on a one day shoot.

squeegeesContent well produced like Squeegees will eventually leave us amateurs in the dust. But in the mean time the marketers of this content are probably beating their head against the wall and missing some things that are obvious… keep costs down, leverage existing cewebrities from YouTube, collaborate, appeal to current audiences, and evolve the style over time.

Squeegees’ producer, “Stage 9” describes itself as “seeking filmmakers who create high-quality series at a fraction of the cost of film and television.” I don’t doubt that Squeegees was produced at a fraction of a television series, but that’s still too much. I don’t yet see an advertising model that can substantiate actors, writers, directors, sets- except perhaps a single sponsor that gets more than CPM and uses the content to attract prospects to a site that converts them to customers. But if I was Stage 9 I’d start with the advertiser, and develop content that fits their goals and demo.

That said, I’m ready for a cameo, Squeegees! And that goes for any other killer content creator looking to boost its visibility on YouTube! All I ever wanted in life was to make someone famous so they can ignore my calls when they hit.

RIP for Paid Content (bring on the ads)

It’s pretty clear that consumers are hesitant to buy professional video content much less amateur content. Given that I’ve sold exactly 13 copies of my “best of Nalts DVD” it’s no surprise to me to see that Brightcove is abandoning its “pay for content” model:

On July 31, 2008, we plan to discontinue the Pay Media (Beta) functionality within Brightcove. The Pay Media functionality allows publishers to rent or sell their content directly to consumers. Since its beta release in January 2007, less than 1% of our customers have tried the feature and an even smaller percentage of our customers use it routinely. Given the minimal adoption of Pay Media and the feedback we have received from the market, we are going to discontinue this beta functionality.

Too bad. I was thinking about selling “White Bucks” for $250.

Southpark on Monetization of Digital Content

Kyle from Southpark puts it well in this 30-second clip from “Canada on Strike.” The clip’s called “The Promise of Future Revenue.” Thanks to Jan for finding it.

Kyle Southpark Canada StrikeBoy I’m sure glad that’s over with. Me too. Yeah, but you know I learned something today. We thought we could make money on the Internet. But while the Internet is new and exciting for creative people, it hasn’t matured as a distribution mechanism to the extent that one should trade real and immediate opportunities for income for the promise of future online revenue. It will be a few years before digital distribution of media on the Internet can be monetized to an extent that necessitates content producers to forgo their fair value in more traditional media.

In this part of “Canada on Strike,” the Southpark folks meet some YouTube weblebrities (the cliche one-hit wonders). There’s something pervursely symbolic to see all of the Internet stars — laughing baby, sneezing panda, gopher, Chris Crocker, Chocolate Rain, Tron guy, Numa Numa — end up in a bloody mess on the floor.