“Google is going to let Web sites show YouTube videos” sounds like much more than it really is, but it also turns out to be much more significant than it might initially appear.
Google said this week that it would let members of its AdSense advertising network show YouTube videos. It turns out, at least initially, that Google is going to have a couple of hundred professionally produced videos and video commercials that its AdSense members can show on their Web sites. Google promised that there would be more videos in the future.
Christine Lee, product-marketing manager for Google’s AdSense, said, “We’re excited about video units because we see this as the first step in content distribution on AdSense. Advertisers have a new vehicle to distribute their messages to their target audiences and people can tune in to interesting videos.”
The move is in fact much more than what Google’s announcement seems to indicate. Because of Google’s size, financial strength, the popularity of its search service and the size of YouTube’s audience, it is now in direct competition with every TV network that depends on ads for revenue, especially those that plan to show videos on their own Web sites. That today list includes such as NBC, ABC, Fox and CBS and ad-supported TV networks in Europe and Asia in the future.
NBC Universal (NBCU) and News Corp’s Fox have a joint venture called Hulu that will offer an ad-supported embedded video player to Web site publishers. It’s due out in beta later this month. There’ll be no user-generated videos, only professionally produced material from NBCU, News Corp and others. The Disney-ABC Television Group is already using an embedded video player to deliver full-length TV episodes that include ads. Joost, from the founders of Kazaa and Skype, will show third-party TV shows and has amassed a number of advertisers that are interested in showing their wares to a worldwide audience. There are other online video services including the BBC, Channel 4, Apple TV, BitTorrent and Azereus’ Vuze.
The difference between YouTube and the others is that Google has ads that carry videos while the others have videos that carry ads.
Google, whose AdSense network is the world’s largest online advertising network, will allow Web sites that belong to AdSense to show some relevant YouTube videos. AdSense will display rotating text ads within the embedded video player. The text ads will not appear on the videos when they’re viewed on the YouTube site.
AdSense already shows ads on hundreds of thousands of Web sites, and will now be able to deliver YouTube videos to those sites, significantly increasing YouTube’s reach. Google will allow Web sites to embed videos from some YouTube content creators. Web site publishers will be able to control which content is shown by selecting specific videos, categories or YouTube partners.
The advertising revenue will be split between Google, the video creator and the owner of the Web site. It’s the first instance in which Google has paid YouTube’s content creators. Advertisers will pay on a cost-per-click or cost-per-impressions basis, as has been AdSense’s policy.
We can’t forget that little matter of copyright and the $1 billion copyright lawsuit that Viacom has filed against Google and YouTube, something that is undoubtedly keeping Google on the straight and narrow.
AdSense will not distribute the great majority of YouTube’s videos, many of the user-generated ones, at least not now. Rather, it will initially distribute a few hundred select videos created by commercial media companies. One reason for this, perhaps, is that Google, which likes to do things in an automated way rather than having a person intervene, does not “know” what the majority of the user-generate videos are about.
YouTube has been testing ad-supported videos since last year with ad-supported content from MTV Networks, Sony BMG Music and Warner Music Group – but with only a limited number of Web sites. Other video sources are expected to be YouTube content partners such as TV Guide Broadband, Expert Village, Mondo Media, lonelygirl15, Extreme Elements and Ford Models.
Now, any English-language AdSense Web site operator can generate HTML code that can be used to embed sponsored YouTube video into a Web page. Similar to a Google text ad, the video units will play only when a user clicks on them. Google can compare how many times a video could have played with how many times it actually played and how much of the video the viewer watched.
Web site publishers have a choice of several display configurations, including three video screens, such as a player that displays banner ads at the top or one that has text ads that pop up randomly at the bottom of the video. Three different media player sizes are available as well as custom color schemes in order to suit a variety of host pages.
“Video units enable AdSense publishers to display videos from several YouTube content partners,” Lee said in a blog post. “The video units are ad-supported, and the ads are relevant to both the video and the site content, as well as unobtrusive. AdSense publishers and YouTube content partners will receive a share of the ad revenue, so video units enable both groups to earn incremental revenue.”
The new AdSense service will be available only in the US. Google made no statement about its launch elsewhere. The move is the most significant step Google has taken to monetize YouTube, for which it paid $1.6 billion in 2005.