Jeremy Liew has a nice post on whether contextual advertising will work in online video. He notes the absence of contextual targeting for YouTube video ads and wonders whether direct response will work. I think there are a couple of things he doesn’t mention that are worth noting:
- I think everyone thinks “direct response advertising online” is a code word for “lower eCPM”. This is probably true. One huge difference between monetizing search results today, AdSense, and monetizing video with in-video ads is that in-video ads decrease your user experience. Overlays are clearly an attempt to avoid this and be more like the “associated results” that you get with monetizing search results. As in-video advertising impacts user experiences, pricing can only go so low. Overlays probably are less constrained in this area.
- Given the volume of videos on YouTube, unless they establish a model that serves the needs of direct response marketers, they will probably not be able fully monetize their inventory
- Obviously you have to offer a CPC or CPA model to attract direct response advertisers.
- Last and most importantly, Google is great at contextual targeting, but not for video. Dissecting video is completely different from reading text. Call me crazy, you will see companies like ScanScout get gobbled up for big money as advertisers seek more sophisticated targeting and companies like Google look for higher eRPMs on advertisements
Finally, I promised my buddy Jon Alsop that I would give him some super duper link love for his new blog (alas a blogspot user so no trackbacks). Jeremy Gold has a blog as well. None of it is remotely work related, but two super sales guys blogging, this is a good sign for the target market of Cogmap!