You Tube is not spinning money for money spinning Google
Google has admitted recently that You Tube still isn't making money. Google forked out $1.65 billion two years ago to buy the video portal hoping that its popularity would pave the way for more riches.
You Tube attracts much interest and a lot of publicity, sometimes for bad reasons. Lets face it, publicity is always beneficial, regardless of whether it is positive or not – look at the effect it has for Kate Moss. Therefore, You Tube gets the traffic, but how have they not converted this to money. Well, there are three reasons I feel strongly about and I want to discuss them now.
1. Contextual targeting always leads to high impressions but low CTR. As adverts on You Tube can be placed through Adwords, it is on a CPC model and without clicks Google will not make revenue. Users of You Tube are there to be entertained by different videos and various content, nothing of the same topic. For this reason it is difficult to position adverts next to topics which are relevant to the ad like Google does with other content sites. For example, if I have an advert for GHD Hair Straighteners then I can’t find specific pages on You Tube whose content would be relevant to the advert placement. On other Google content sites, you can.
2. Analytics – at the moment, if you do video adverts on You Tube you have to setup a You Tube Analytics account, separate to the standard analytics account that you have for your website. If Google is keen to progress this then it must realise that Video ads / YouTube is strongly associated with PPC and Adwords, and in turn associated with Google Analytics. In order to take it to the next level, Google Analytics must integrate a package for You Tube advertising management.
3. Digital shift of offline media (TV adverts) to online adverts (video adverts) has yet to boom. TV advertising revenues are dwindling mainly because we are seeing increased spending online. More and more TV adverts that you see today are being placed as video adverts online. A notable example of this was the recent Vauxhall Corsa advert with the little puppet men and the rather attractive lady. This got huge exposure through placement on Google’s content network.
Google has to realise that if it is to spin money then they need to work hard it to make advertising more effective because advertising is the main way to generate income. However, it doesn’t seem to me that Google are intending on making money from it. Eric Schmidt (Google CEO) was interviewed yesterday in San Francisco and said that Google’s plans were to change the world. “The goal of the company is not to monetise everything but to change the world. Monetisation is a technology to pay for it”.
I want to conclude this article by giving a stark warning. The fundamental goal for Google all along has been to understand the exact intent of a user to deliver the exact results they are looking for – it basically wants to be telepathic. With Google custom homepages, Google are amassing a huge amount of search data relating to individual searchers – what they like, what they do socially, their retail needs. Google haven’t confirmed if they are compiling this information or their intent with it, but if you assume that Google is applying the intelligence that it’s staff has, Google will make the most of this information to display more relevant adverts to individual users.
Be warned of who or what could be tracking your actions online.
