After setting an aggressive agenda for 2008 to monetize YouTube’s massive traffic, Google has made a surprising announcement: they will let publishers sell their own ads.

While at first glance this seems like a move made out of frustration from their own lack of success (estimates run from $90-200 million in revenue for 2008; keep in mind they spent $1.65 billion for the site in late 2006), it is probably strategic on a few levels:

• it provides publishers a reason to stick with YouTube, or at least syndicate their video content through the site
• it grants Google access to a wide swathe of publishers interested in online video advertising who are often bypassing networks in favor of direct deals with publishers
• it dovetails nicely with Google’s previous third-party ad network support announcement, signalling another popular content format that it wants to dominate ad delivery for

As noted on Friday, user-generated video is one of the trickiest Web 2.0 formats to attract advertiser support. Since YouTube has continued to face an onslaught of lawsuits for not enforcing IP claims, advertisers might be wary that the service will do any better at meeting advertisers’ content standards.

Advertising on video might very well be something that needs to be built from the ground up.

This entry was posted on Monday, June 9th, 2008 at 2:50 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.