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Wednesday, July 09, 2008

YouTube's Ad Quandary

Google and YouTube are still trying to figure out how to make all those YouTube videos pay off through advertising, writes Kevin Delaney of the Wall Street Journal.

    Although users of the popular video-sharing site view clips more than one billion times on most days, the site hasn't been as popular with big corporate advertisers. World-wide revenue from YouTube ads has fallen short of Google's expectations this year, and is likely to total about $200 million for the full year, according to two people familiar with the matter.

    YouTube is critical to Google's campaign to extend its advertising reach far beyond text ads tied to Web searches, its revenue powerhouse. Google wants to sell more video ads and display ads on YouTube and elsewhere. It also wants to crack the television, radio and newspaper ad markets. Its target: the 90% of global ad dollars that don't currently flow to the Internet.

    "Most advertisers are still testing the waters on YouTube," says Sean Muzzy, media director at Neo@Ogilvy, a digital ad agency owned by WPP Group's Ogilvy & Mather.


The piece also mentions that Google is now considering selling pre-roll and post-roll advertising on YouTube... something that YouTube's founders have always been opposed to.

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