How Does YouTube, Google, Yahoo and the Next 5 Years Play Out? What Will We Measure?

So the buzz of the week is the big Google buy.  Everyone is talking about it, writing about it, speculating about it, gesticulating about it.  I would be remiss to let the week pass without adding my penny-sense.  But my perspective is a little difference, as usual.

Consider how video advertising comes into play.  When Google dominates the next mechanism of the web beyond search, and figures out how to monetize it, will we see the same level of measurement?  Google bought Urchin, called it Google Analytics and gave it away.  But it does not come close to the reporting capability that one gets from display advertising.  No where near as granular.  Bottom line, you don’t know impressions so you can’t know effectiveness of messaging.  Big whole in analysis there.

So what happens with video when you can’t measure impressions, or if you can but you can’t measure uniques.  Booyah Network’s SpotXchange is a new concept video advertising ad server that demonstrates how to insert ads into video on sites like YourTube.  A publisher can pull ads via tags, attach them to the front of the video and force the viewer to watch a spot before running the desired video.  But there is no measurement, just the play.  There is no click-thru, or post-click analysis measurement that I have been made aware of that rivals what one can gain from display advertising.  So if this is the next great thing, how can it come to the market without doing so with what the market expects in analytical knowledge of campaign performance?  Maybe they can’t.

Great research that I have come across: Mary Meeker from Merrill Lynch’s “Sector Wrap: Web Ad Spend to Spike.”  In this report, she forecasts that Internet ad spending will grow 20% a year to $32B by 2010.  Yahooooo!  Great numbers, best yet.  Of course, Merrill’s numbers are usually the highest.  You can dig out this report on your own so I’m not going to give you all the stats here.  But what was interesting was her insight into video advertising.  She described that video, as the up and coming, would not likely rival search or display advertising as its own new source of revenue in the near future but would rather generate a new stream of revenue as a wrap-around medium.  Running 10-20-30sec spots in front of video will steal budget from broadcast not necessarily from Internet advertising because Internet advertising has a different set of metric driven behind it.  Usually direct response driven.  Think about that.  The Internet is the largest 1:1 capable medium in existant.  There is one of my consistent messages!  Speak to each person differently through an ad campaign.  So the wrap-around banners, contextual placements, keyword and text link opportunities that video will create is where the real nearer-term revenue will come from.  Interesting.

Maybe we need not be so concerned about video’s ability to track, measure and report the way web advertising does right now.  More importantly, let’s focus on how it can be leveraged to create more high-valued inventory for traditional Internet advertising.  Plenty of people will be working on monetizing the video ad.  Google for one thing.  But there are a lot of people with a lot to gain who should be working on evolving the display mechanisms to incorporate video advertising so that we evolve with it….

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