YouTube’s starting to experiment with revenue sharing for video producers, though it is not clear yet how the details of the program will shake out. Marshall at ReadWriteWeb suggests this action might “put to rest” the notion that YouTube cannot monetize content, but I think it will actually show how difficult it is to monetize even popular content. Unlike targeted pay per click advertising it’s hard to “hit” a customer with a relevant ad when they are simply surfing aimlessly for clips or watching a funny clip. True, you get some vague targeting information such as a possible few interest areas, but this is nothing like running a per click ad during a search for “Buy a sony digital camera”. The latter is a golden opportunity to strike at the point of purchasing decision, and it’s why PPC, especially at the brilliantly matched Google PPC adwords environment, works so very well.
About a month back, when YouTube started allowing you to embed videos in a web page and use adsense to monetize them I tried a small experiment setting up a new website called “Funniest Online Videos“, fovideos.com. There are adsense ads embedded around the funny clips that Google pulls from their YouTube comedy section.
After sending a few thousand people to the site using some untargeted advertising I think I made something like 35 cents from a handful of clicks. Sure, I could work hard and target better and get some organic (free) traffic to that site, but as they are starting to find in many other venues video clip advertising does not pay well at all. I’m very skeptical of this model for ads, and given the deluge of clips I think advertisers will soon see this type of advertising as a waste of money, even at the low end of the scale.
Back in July I missed this great post by Dave Morgan at AOL but thanks to Danah Boyd’s post it has surfaced again. The findings are very surprising and very relevant to anybody running click or online advertising campaigns. Dave summarizes the findings very concisely as follows:
We learned that most people do not click on ads, and those that do are by no means representative of Web users at large.
Ninety-nine percent of Web users do not click on ads on a monthly basis. Of the 1% that do, most only click once a month. Less than two tenths of one percent click more often. That tiny percentage makes up the vast majority of banner ad clicks.
Who are these “heavy clickers”? They are predominantly female, indexing at a rate almost double the male population. They are older. They are predominantly Midwesterners, with some concentrations in Mid-Atlantic States and in New England. What kinds of content do they like to view when they are on the Web? Not surprisingly, they look at sweepstakes far more than any other kind of content. Yes, these are the same people that tend to open direct mail and love to talk to telemarketers.
What does all of this mean? It means that while clickers may be valuable audiences, they are by no means representative of the Web at large
Indeed, this means that many online marketing campaigns may need to dig a lot deeper to obtain a positive ROI, and for some campaigns positive ROI is not attainable. If, for example, irrelevant clickers (not to be confused with click abuse) mean you’ll have to spend a few dollars to reach a single prospect, and your margin on your product is only a few dollars, you may be fighting a losing PPC battle for online hearts, minds, and pocketbooks. On the other hand if your target audience is, say, midwestern stay at home soccer moms, you may want to up your PPC spend dramatically because your nickel or dime per click could be worth many times that in prospective sales.
Obviously Dave’s post is only the beginning of the big story which has yet to be written, and I’m not clear how representative this sample was of all PPC activity (I think it was broadly representative though – they looked at billions of data items). However this helps me understand why some of my PPC experiments have failed to yield much of a return. A good travel experiment given these findings would be to look at midwestern travel patterns and try to advertise popular packages to Mexico or other commonly travelled points south in the winter. Since women are the main travel planners this match could work well to increase the normally very low conversion I have seen on travel related PPC spends.
update: I’ve rewritten this post after realizing Mashable is not saying AC did anything illegal.
Mashable is falling just short of charging Associated Content, a well-funded content distribution portal, with plagiarism. Apparently an AC contributor has lifted a lot of Mashable articles verbatim and posted them at AC. Mashable argues that since AC claims to edit contributions they should have caught this.
As Mashable notes what makes this scraping and stealing more conspicuous is that AC is a relatively big online publishing player, not a junky run of the mill “made for adsense” site that would soon be delisted from Google and abandoned.
Of course, few sites screen contributors fairly carefully. In the rush to create profitable social communities, many sites are willing to turn a blind eye to who is posting what and from whom. Google’s getting better at delisting plagiarized content, but it’s still a big problem. The solution is fairly simple but so far few are willing to implement better screening of publishers and writers. Google adsense, for example, is often run on the lowliest of scraped content websites. Since Google has a record of payments to those publishers I find it hard to believe they are doing a careful job of deleting them from the system. I have not even heard Google claim that they do anything much to ban people from the Adsense program. With adsense as a prime monetizer of online content both legitimate and plagiarized, it would be nice to see Google blacklist abusers and pass this along to other advertising networks.
However based on my experiences as an advertiser Google is probably the best at following up and creating at least a minimal level of accountability for publishers. I bought cheap traffic from Enhance and the number of junk sites was very conspicuous in the logs. Conversion was close to zero and I discontinued the campaign.
Venture Capitalist Fred Wilson is always up to something interesting, and his current Facebook test is no exception to that rule. He’s making a modest buy on a 1000 ads / $10 per day mostly just to see how the new Facebook targeting works for his Union Square Partners advertising.
Unfortunately a VC firm is not likely to get much “business” from Facebook, so maybe I should fork over the pizza per day price for a test on something like motel bookings or air travel?
However I’m pretty confident the money would be wasted. As I’ve suggested before Social Network advertising, targeted or not, is nothing like Google SERPS advertising and it’s become hard enough to leverage that to any advantage in the travel space.
This Internet Advertising Bureau report notes that online advertising is still showing explosive growth. Interesting is the fact that the types of online advertising – with search ads at the top – seems to have stabilized somewhat with “pay for performance” one of the few categories that has clearly increased from last year.
I don’t think this stability reflects the “optimal” mix of ads, rather it is more an indication of how the big players take some time to get comfortable with innovations in advertising, and still stick to more traditional CPM style approaches rather than the clearly superior PPC and pay per performance models. Clearly even many of the big advertisers and agencies still have fairly weak SEM and SEO departments so they’ll choose to use big CPM campaigns that are easy to analyze rather than the more productive – but more complicated to manage – PPC and performance approaches.
Online ads are now a mainstay of any good campaign, but it’ll take some years before advertisers realize the foolishness of many online advertising approaches which generally include bloated CPM impression campaigns. Much more effective are targeted organic and PPC ad campaigns, but these require more analysis and a newer perspective.
The most conspicuously stupid type of campaign – still extremely popular in travel – is to use expensive print advertising in an attempt to boost online visitation. I studied this *extensively* across many print ad types during my work marketing southern Oregon several years ago and despite the clear results that showed print ads lead to only a tiny number of online visits, many travel marketers still think print is an effective way to promote online. It’s not, but it will continue until the incentives and simplicity of squandering money on ineffective print advertising go away. The lack of research in this area is odd to me given the huge total travel advertising spend, but most travel research is self-serving and often sponsored or conducted by the very agencies or entities that benefit from certain results, so stupid biases remain intact for a long time.