New Disclosure & Transparency Code for Social Media

Social media pioneers have long advocated honesty, disclosure, bacchanalianility, transparency and authenticity.

Today the world’s most widely read blog that is called WillVideoForFood announced a new short URL you bloggers, social-media whores and YouTube stars can use conveniently… It’s as follows:

Sellout? Yeah I sellded owt beeatch so what ya gonna do?

I probably ought to have come up with that code in June 2007 when I made this video featuring the fictional “CashToBuzz,” inspired by appauling businesses that would pay bloggers to review companies and products favorably. And yes, we were really chased out of a mall.

Just remember kids… it’s only pimping if I’m not in on the deal. And it’s only wrong when you pimp opaquely. Or forget your bacchanalianility.

Exclusive: How Much Money YouTube Partners Make

{Update from 2013 reveals YouTube stars making $4 million plus per year}

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. If you’re curious, read on. If you want to make big bucks, buy my book first. You’ll still be facing tough odds, but at least you’ll wander into the jungle equipped with some survival tools.

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.

SEM Plus Video = Gold in ‘Dem Hills

Pay attention now, online-video and advertising peeps. This lil’ blog post is going to be on the final exam. It might even spawn a trade article and a new business.

  • Paid Search Video Gold DiggerSearch engine marketing (SEM) is big business today, with agencies charging retainers to help websites rank high on search engines (increasing qualified traffic) and help manage paid advertising. Paid search (text ads on Google, Yahoo and MSN) already is annually around a $10 billion industry. Maybe more, maybe less.
  • Online video will likely be a billion plus industryin 2009 and growing at a rate of between 50-70 percent annually for the foreseeable future (see roundup of online-video industry projections).

Would you like Uncle Nalts to tell you where the gold is in ‘dem hills?

Kay, first let’s get into our time machine and go back 7-8 years. Around 2000, Nalts got nervous about the impending bubble burst and took shelter with Big 5 Consulting (KPMG). Turns out the Big 5 was no better poised than Internet marketing agencies and eventually Nalts would camp-out on client side so he could see his kids grow up. But that’s besides the point. Nalts got some good training on consultative selling and how to solve problems for C-level (that’s CEO, CIO, CFO) folks. Seems the VITO (very important top executive) loses sleep sometimes, and if you can help him/her sleep better they don’t mind giving you money. They sleep better when they can measure a marketing spend especially in a tight economy.

Hi. I\'m full of shit. I\'m going to manage your paid search campaignBut I’m getting ahead of myself… before Uncle Nalts left his interactive agency (Qwest), he pitched The Big Guy on building a paid-search practice. Brand teams were happy to spend $300-$500 thousand dollars on a big ass website, but it was equally important getting customers to actually visit those big-ass websites. Eventually the interactive agencies figured this out, but not before screwing it up with big-mouth idiots who promised to handle paid-search campaigns like “day traders”… and then ran off to the next pitch and left the campaign unoptimized and in autopilot. I can smell these people before they enter our building.

Even today agencies suck at SEM with a few exceptions, and most acquired their way there. Of course as a Product Director, I’m reluctant to hire a specialist SEM firm because they’ll only get into a pissing war with my interactive agency and media buyer. My peers at other companies consolidate paid-search spending even though the media spend is bid-based (so you don’t exactly garner spending/scale efficiencies except on campaign and analytic fees). So I hire an independent consultant to fill giant gap between my brand team, internal groups (promotions/Internet), agencies and analytics.

The best way to predict *some* of video’s future is to look at the past.Online video will follow the route of the SEM field in 2008-2011. Sure other things will grow and die along the way (from Hulu and eFoof to Revver and Vloggerheads).

But trust me that online video will eventually be managed the way we manage all other promotional content and media:

  1. Brands spend a fortune telling their story and making persuasive content (and sometimes even serve customers along the way). This stuff will become less important with time unless it is engaging and, dare I say, entertaining.
  2. We work like hell to get high organic (unpaid) placements on The Orb called Google- that means optimizing our content and getting it distributed on credible third parties. In video, of course, this translates to tagging, seeding, moving quickly, and leveraging popular amateurs– even little Uncle Nalts gets about 1.6 MM uniques per month on his videos.
  3. Finally, we buy ads on Google for relevant keywords- I’ll speak for myself but there’s NO OTHER SPEND that’s directly as measurable as paid search. It’s bending over the rest of the marketing mix and has it squeeling like a pig. Its only weakness  is scale, but I like the pay-for-performance accountability.

Now Uncle Nalts was going to hoard these powerful insights, but he’s sharing them here on his blog for the low, low price of nothing. Nalts will even confess that this is the space in which he wants to play (not marketing drugs until he retires).

You gotta do what you love, which for me is entertaining and marketing via emerging media. How fun to help brands get their good content seen via existing video sites and search engines, then supplant that “organic” play with targeted advertising buys (ideally at a cost-per-click and keyword targeting level). Okay it doesn’t sound as fun as blowing bubbles or eating Captain Crunch, but it’s fun to me. And if the video content sucks, then let’s create new videos without exhaustive, bloated production shoots. Even more good news: you don’t have to spend $250K MM on YouTube to get paid (promoted) views.

If you’re interested in financing a startup around this, just send me cash. I think I need about $500K, but no pesky venture capitalists please. You VCs creep me out, even if you’re still investing in video like drunken sailers.

Honestly, here’s why I don’t mind sharing this powerful insight (which some of you will find obvious now that I’ve said it, and others will be only mildly amused because the significance is lost on them). Because few are poised to tackle this issue yet. How many have experience with the mix of marketing, Internet advertising, and video? And the magic is in the implementation unless you’re the fat, smelly guy who pitches “SEM dashboard” full time.

The agencies will make a mess of this. I think it goes without saying that large full-serve “integrated” agencies (don’t laugh when I say integrated please) will wait until 2012 until they trip over this space by accident. Picture the dinosaurs that used to chew their tails raw before they even felt the pain. 

Even the interactive agencies will make a mess of it. Remember when the interactive firms tried to get into paid search and search engine marketing in the early 2000’s? It was embarassing. And most interactive agency people don’t know online video, much less know what a social media and online-video marketing plan might look like. Heck a woman at an agency last week told me she hadn’t heard of Twitter (but YouTube sounded familiar). And of course information management is still using terms like “portal” while PR firms spew about “blog and social media strategy,” and wouldn’t know a viral video if it urinated on their leg or licked them on the face.

While the agencies are ignoring it or screwing it up, a few bright people will build up an offering that helps brands place content organically (and seed it), and conduct efficient media spends to promote the content.  Again- I think the magical stool has three legs: marketing, digital advertising and online video. Yeah- like my old Drunk Uncle Jim used to say- when there’s a gold rush, sell shovels.

After all… it’s hard to sleep when your videos, like $500K bad-ass websites, are “billboards in the back yard.”  

Billboard in backyard

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.

What Does Google’s Acquisition of DoubleClick Mean to Online Video?

Google closed on the acquisition of DoubleClick today, and issued this statement to address concerns (continued Dart service, as well as privacy provisions).

As a buyer of interactive media (primarily paid search but also targeted display), I like this deal. Google’s muscle, innovation and discipline from the paid search origins means this could enhance the metrics around otherwise cute but unaccountable display ads. I’m tired of the “let’s do another bloated consumer survey to find out what display does to awareness, recall and intent.” There’s got to be a way to get conversion rates tied better to display, and if anyone can now prove the “one-two-punch” theory of paid ‘n display (think chocolate and peanut butter yummy), Google now can. And should.

marketing text booksOh, I almost forgot. Here’s my “Enlightened Stupid Marketers” video I posted this morning to spoof my profession, and it touches on the impact of friggin’ newspaper ads versus paid search.  Did you know that stupid marketers have two choices: to remain stupid, or pretend not to be? The core YouTube audience really doesn’t care much for these niche videos, but readers of WVFF might.

Where was I? Oh. Now here’s the challenge. This deal kinda makes some online media buyers a little twitchy, as some get threatened by consolidation downstream. Some of those flickering-bulb types (you know- the pretty ones that talk too much if they talk at all) will feel they’re one step closer to being as obsolete as their moms or older sisters who were, naturally, travel agents. Maybe they should be doing PR afterall?

candy cornIn reality, the online media mix is dynamic and will always require smart, strategic buyers. It’s just that they’re only about 10 of them in the world, and 7 of them lose their charm exactly 6.5 days after they win the new account. Like Candycorn, the first few handfuls are delicious, and then suddenly you feel like you’re eating sweetened candles and can’t stand the site of them. You loved the little puppies in the litter, and now they’re just pissing on the furniture, biting the couch and barking all night.

So get to the damned point, Nalts. What does this acquisition mean to video? Well, probably nothing initially. But long term it’s good news for two reasons:

  1. Text ads are currently more relevant than display ads around videos. Since Revver hasn’t been selling many single-frame display ads these days, we’re seeing the Google-run text ads (Adsense) served “InVid” style. Guess what? They’re actually relevant and capture my attention more than current display ads. I watch a lot of videos, and have developed ad anethesia for the limited number of CPG companies doing “run of site” ads across YouTube. Don’t stop, guys. I owe my YouTube partner income to you.
  2. Since it’s Google buying Doubleclick (and not the other way around), we’ll see display develop some of the maturity of paid search. Harnass the visceral medium of InVid (quarter frame ads) with their sister display ads, then add the relevance of text relevancy. And if the databases can be merged in ways that don’t freak out the privacy people, then ads become even more relevant albiet sometimes creepy.

Now Google has two more challenges to make video advertising really interesting.

  1. The Google account teams have to grow beyond paid search. This is not an easy transition. SEM (search engine marketing) buyers have a very hard time with CPM (cost per million- a term for buying for an ad based on impressions not performance). Meanwhile SEM sellers need to be trained to talk to CPM junkies. It’s kinda like being bilingual. You need a translator around for a period. Currently, it’s a buyer’s market for video advertising. I am convinced that the “marketers are afraid of buying ads around CGM (consumer generated media)” hype is a big, fat, stinkin’ red herring. It’s just that nobody is showing marketers how online video ads and more creative sponsorships can move their business. Google plus YouTube plus DART should be able to pull that off, but it’s going to require behavior and organizational shift.
  2. Now the big challenge. If I get a CPC (cost per click) based on text ads around my videos, then I’ll tag them all with free Viagra, mortgage, loans, lawers and digital camera.  So we need that ever-evasive “text recognition” technology that turns my droaning voice into targetable text. Blinkx was supposed to be doing this years ago. Then, of course, I’ll just start saying all those tag words as part of my scripts. 🙂

Bubble Bursting for Video Creators Hoping to Monetize Content?

bubbleOnline-video creators are sobering up after an intoxicated 2007, as they realize that the “road to riches” via online video is fraught with challenges. Business Week proclaimed “amateur video hour” as over in December. Crackle and other sites migrated from UGC (user-generated content) some time ago. And here are some quite recent data points that, alone, aren’t really newsworthy but tell a sad story together:

  • Metacafe set a higher bar for revenue-sharing “Producer Rewards” program, much to the dismay of some creators who saw their popular videos drop from the program (see Metacafe forum).
  • Revver, the pioneer of online-video revenue sharing, was sold for pennies.
  • The initial participants of YouTube’s Partnership program (which shares revenue with creators) hit their one-year anniversary in March. Although YouTube and its creators are not permitted to disclose the specifics, I do have sources that reveal early participants received fixed fees that (in some cases) allowed them to quit their day jobs. The rest of us joined when YouTube had adjusted the program so that we’re paid a percentage of ad revenue, and I can’t disclose specifics. Compared to nothing, it’s welcomed cash. But it’s far from enough to live on.

For sure, some creators are doing well with sponsored gigs, DVD sales and rare television contracts. I’ve managed to augment my income by creating sponsored videos, and have done fairly well in the past 6 months. But it’s certainly not enough to quit the day job, and I’m not patient or risky enough to hold my breath for a lucrative television contract.

Solution 1: Pay for Content?

paytoilet5cents.gifWith few exceptions, viewers don’t yet pay for amateur content. This is especially true for early adopters of online-video, who have enjoyed free video, including amateur stuff, copyrighted material via YouTube, and free movies & music via P2P sharing. As the mainstream audience moves in, the market for paid content will increase, but mostly for professionally produced and well marketed video. Perhaps we’ll see a third-party aggregate some second-tier amateur content and develop a paid subscription model (especially if that content can be fed into PC, mobile and television). However an individual amateur would inarguably lose the vast majority of their audience if they required the audience to even move to an alternative channel (their own ad-supported site) or charged for it. Even Howard Stern lost most of his audience when he moved to Syrius. So it’s no surprise that I’ve sold only four copies of the “Best of Nalts” DVD.

Solution 2: Ad-Supported Content

spaceforrent.jpgAs much hype as we’ve seen about consumers avoiding ads, this is the most viable, sustainable model. Simply put, good content won’t sustain for free, and amateur content hasn’t a prayer unless it’s supported by ads. Currently, this model is rate-limited by two sad realities. First, advertisers have been slow to buy ads around amateur content — even YouTube doesn’t appear to be selling its full inventory of InVid (overlay) ads. Secondly, there’s not yet broad enough distribution of this content.

I’ll argue that good video content and consumer demand exists, but people there aren’t yet enough viewers of amateur content to warrant significant dollars from advertisers. And we’re in dire need of an easy vehicle to view UCG via our mobile and television boxes, which will increase both viewer demand and advertising inventory (my next post will explore web/TV devices, which I believe are the lynch pin here).