YouTube’s New Two-Sided Ad Model

More Google news here, and yet again the good and the bad. The company is ramping up its advertising business to work more closely with the theme of YouTube. That is, video.

The Google subsidiary is placing a shuffle of text ads along the bottom of viewers’ video windows. (If viewer shows enough interest to actively click, will expand to a video spot.) Presumably, Google wishes to have its ad model presented on YouTube befit the site as a whole, and it’s already learned quite well that its pure-text links simply aren’t the hit they are on Google’s main pages.

YouTube has not gone so far as to insert mandatory 15- to 30-second adverts before homemade bloopers and copyrighted DVD scene rips, but the company and it’s business model clearly seem to be trending in that direction.

With the recent unveiling of a system in which to share ad revenue, first made available to a small select group of members/directors, YouTube has demonstrated that it has all but reached the zenith of online video distribution and understands it must now learn somewhat swiftly how exactly it can best monetize the “network” to increase revenue as well as cater to an audience of producers who wish to benefit financially from the placement of their content on the website.

YouTube has begun sharing revenue with roughly 30 of the “top producers on the site”; the list includes names like LisaNova, Smosh, and, yes, Lonelygirl15.

What’s bigger news? The plan to share the cash? Or the introduction of inline ads? We all know which has the potential to be great and which has the risk of falling by YouTube’s wayside. Therefore, I have an inkling that we’re going to see a good measure of both. (The company would surely like to maintain some measure of balance. The institution of each will ensure that it does so.) Many won’t like having ads displayed along the bottom of their in-browser screens, for obvious reasons. In some ways, viewers enter places like YouTube to escape the horror that is the old television model. A good number of YouTube members will very much enjoy the availability of shared revenue, too, however. Such a system has world very much in the favor of sites like Revver, which has itself proven quite successful, despite the fact that it receives but a fraction of the visitors and viewers YouTube receives.

Though these developments aren’t groundbreaking, they will slowly (perhaps quickly, even) become the norm on the video portal. Google has been the smartest of all giant ad houses on the Internet, so the careful implementation of its new YouTube-specific revenue generation model is a given. Throw in a good amount of “sharing the riches,” and we’re really bound to see YouTube continue to grow steadily over the next few years. It may even reach the point at which it plays one of the most important parts in Google’s entire game plan.

If you enjoyed this post, make sure you subscribe to profy RSS feed!