The Google Effect

Too much has  already been written about the Google/YouTube deal--from the jokes on late night  TV to Mark Cuban's firestorm ("only a moron would buy YouTube") to fears of a  fire hose of copyright suits to breathless recounting of the numbers. But, aside  from all the hype, it's important to understand how the deal impacts the online  video advertising industry.  

Credibility  

The quick win for online video advertising is the generous boost  it receives as a category--from the large dollar amount paid to  the Google  brand. As the largest acquisition ever made by Google, it brings the  significance of online video front and center and gives the industry a lot of  good buzz. This is a classic case of a rising tide lifting all boats.  

This is a major wake-up call to traditional TV advertisers that  there is BIG money in online video and that advertising will play a huge part in  its success. As Google has invaded both radio and print, this may very well be  its entrance into the television model. However, instead of working within the  established distribution channels, it is creating its own proprietary channel  and will be able to dictate the laws that govern it.  

The perception of online video has been weighed down by YouTube's  reputation for illegal videos, questionable content and homemade videos of  random people doing idiotic things.  Now, with the Google brand, that perception  is well on its way to changing. If Google can continue to address the copyright  issues (YouTube had already made significant progress with most of the major  media providers on the copyright front) and improve the indexing, searchability  and necessary filters, advertisers will begin to feel comfortable that their  messages won't be tarnished.  

Searchability  

Google's mission statement: "to organize the world's information  and make it universally accessible and useful." Google is really, really good at  search. But in order to provide good search tools, it needs a significant supply  of material to search. Google builds its algorithms to improve searching with  more data to search. But Google Video just wasn't giving it enough to work with.  

So the YouTube acquisition gives Google access to the mother lode  of online video, and I think we can all expect to see vastly improved video  search now. Improved video search helps the industry by driving traffic and  enhancing the user experience. Advertisers can benefit as well from the  development of real-time contextual ad placements. To many, this is the holy  grail, but it is certainly not perfected yet. Whether it's incorporating  metadata, speech or image recognition or another method altogether, the ability  to match a targeted video ad with a relevant piece of content is extremely  valuable. The next step would be to analayze segments of content within a single  long-form clip and then insert ads near those targeted portions.  

Brandability  

Google is very good at providing a robust tool set for advertisers  to auto-bid on ad inventory. These tools are very useful for "direct response"  advertisers. But they're not as proven for traditional "branding" campaigns.  Traditional brand marketers account for the majority of ad budgets--and those  budgets are moving online in droves. According to Advertising.com, the biggest  growth in online advertisers is coming from brand-focused advertisers (32% in  2006, up from 26.5% in 2005).  

Brand marketers are more sensitive to their brand image and  require more human (salesperson) interaction and customized packages. The Google  "machine" for direct response works very well for advertisers who are trying to  spend $1 and make $2. While the nature of their sales process may change, it is  certainly a shift from their proven model.  

So whatever else you may hear about the Google/YouTube deal, it's  a big win for the online video advertising industry. It brings credibility,  searchability and access. Although it's not as clear-cut yet for brand  marketers, the deal will start to clean up the perception of the online video  space, which will go a long way toward raising advertisers' comfort levels.

(Source: MediaPost's Video Insider)