Mark Cuban: "From all appearances, Youtube is trying to squeeze every last nickel they can out of Youtube. They are doing everything they can think of to create advertising inventory. Pre rolls, overlays, display ads, you name it."
That's what many online publishers think advertisers want to buy: pre-rolls, overlays, display ads. But advertisers rarely think like this: "If we buy $100K worth of overlays, we'll hit our revenue targets for the quarter." Advertisers pay for the traffic of certain quality they get sent their way, and, ideally, how this traffic is generated shouldn't be of their concern. This is the principle behind lead-generation sites, and Google's search ads are similar, too.
There's one thing that advertisers who look at YouTube really want to buy. Google, despite all the overlays and pre-rolls, hasn't really been selling it to them, at least not until the recent launch of the sponsored videos program.
I'm talking about video views. I don't think there's an agency out there that hasn't uploaded a creative to YouTube. It's safe to assume that advertisers hope to have as many people view these videos as possible. Why isn't there a straightforward way for advertisers to pay for the views?
Yes, you can buy display ads and featured video units (a minimum order is in, what, six figures?) and now you can also put your videos in video search results, AdWords-style. But shouldn't the burden of driving traffic to your video be shifted from you to Google, who has deep insights into site users' behavior and more computing power than an ad agency ever will?
When a company is being paid for ad impressions, it naturally looks for ways to increase the number of available impressions -- the inventory -- and hence all those crazy ad formats Mark Cuban laments.
But when it is paid for driving views to specific videos instead of ramping up ad impressions, its focus and priorities shift and suddenly an entire universe of possibilities appears. Google knows what tags work best for what videos -- then how about promoting videos by automatically choosing the most optimal tags? Or using the "social graph" of users to identify people with similar tastes and propagate the videos the graph's branches? Or adding a sponsored thumbnail to the "related videos" end frame?
So yes, maybe Google could experiment with selling what advertisers are willing to buy instead of ad formats.