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Tune In to YouTube

  |  August 29, 2006   |  Comments

Two of this year's biggest trends are online video and social networking. YouTube is poised to make the most of both.

This year, the two biggest trends in digital communications are online video and community, or social networking. YouTube is currently in the enviable position of being able to best capitalize on the convergence of these trends. Think about it. At this time last year, only a small group of Internet insiders had even heard of the site. Fast-forward a year: YouTube is a top-20 Web property. In fact, it's now the 14th most popular Web destination, behind The Weather Channel. The site received over 16 million unique visitors in July, and viewership is likely to continue to grow.

YouTube's challenge has been how to successfully monetize this large audience without ruining the site experience and alienating its audience. Text links and banner ads weren't capitalizing on the property's inherent strengths. Then, YouTube announced a smart new solution last week. It introduced two concepts: Participatory Video Ads (PVAs) and Branded Channels. PVAs are user-initiated video ads that integrate social networking capabilities such as consumer ratings, sharing, commenting, and subscribing. Brand Channels are similar to TV channels, focusing on one topic and providing advertisers a place to showcase video content on YouTube within a branded environment. (Full disclosure: we worked with our client Fox Broadcast Company to place the "Prison Break" sponsorship on YouTube's first Branded Channel, the Paris Hilton Channel.)

Our role in this aside, I applaud YouTube's approach. There are no interruptive pre-rolls. "They created a model that capitalizes on the strengths of YouTube and the values of its members (i.e., community, openness, entertainment, and participation)," said Chris Portella, our associate media director. "It is one of the first Web 2.0 advertising models that we've seen, and I'm sure that there will be many more to come. Sure, there will always be a need for high-reach display advertising to help tell a company's stories, but the true benefit of the Web is its immediacy and ability to engage and interact with users. The tools and sites of Web 2.0 are helping to make those connections and facilitate dialogue amongst consumers." So true.

These days, consumers are like walking TiVos, filtering out so much of what they see and hear in advertising. To reach this media savvy demographic, advertisers must give to get. In other words, they have to give viewers something special, something unique, in exchange for their attention. For the "Prison Break" sponsorship, we're including interviews with the cast and other interesting background pieces for both new and dedicated "Prison Break" fans.

Traditional advertising is now entertainment, just as much as any other piece of video. Type in a search for "commercials" at YouTube. At publication time, there were 44,110 results. The most viewed commercial, for Sony Bravia, has over 3.5 million views. Look at the comments; they illustrate the level of engagement. Impressive.

YouTube is also very compelling for advertisers from a measurement perspective. Good video content -- whether or not it's advertising -- flows to the top. We can measure standard quantitative elements like the number of visitors and videos viewed, but we can also measure qualitative elements like viewer ratings, comments, and the number of people who subscribe to receive additional video content. You can't measure this level of engagement with TV viewers.

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ABOUT THE AUTHOR

Mark Kingdon Mark Kingdon joined Organic as CEO in 2001 and has led the company to its current position as a leading digital marketing agency. Prior to Organic, Mark worked for Idealab and provided strategic guidance to emerging companies. Earlier, he was a partner at PricewaterhouseCoopers, where he led the America's retail and distribution industry practice and managed the PWC and Lybrand merger and was a leader in the e-business practice globally. Mark is a member of the International Academy of Digital Arts and Sciences and serves as a Webby judge. He's also a regular contributor to Three Minds, Organic's blog. Mark received his MBA from the Wharton School of Business and a BA in Economics from UCLA.

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