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YouTube Ads Bypass User-Generated Video

Not a toilet-flushing cat in the bunch.

When Google last week unveiled its long-awaited ad model for YouTube, curiously absent were the flushing felines and lip-syncing college kids popularized by the poster child for user-generated video. Instead of running across the site's consumer-generated content, Google's in-video ads will run on 3,000 professional content partners and 70 independent partner channels.


Considering that giant Google spent $1.6 billion for YouTube primarily for its user-generated content, that might come as a bit of a shock. But given that even smaller sites such as ManiaTV have begun to eschew free-for-all user-generated video, it seems to add up to an admission that, while your cousin Joe's video may draw a lot of eyeballs, it will never draw a lot of paying advertisers.

"There's a huge audience built around user-generated content but no evidence that it is a profitable business," said Peter Hoskins, who recently succeeded ManiaTV's founder, Drew Massey, as CEO.

Leaning on the pros
ManiaTV began in June 2006 to let viewers create and submit videos and build their own channels using a mix of professionally produced ManiaTV content and user-generated footage. The site's great experiment will end in October, when ManiaTV will rebrand, nix the user-generated video and refocus on only professionally produced content from personalities such as Tom Green and Dave Navarro. Earlier this month, one of the original user-generated sites, Bolt, folded.

"Premium is the deal advertisers are buying," said Peter Clemente, ManiaTV chief marketing officer.

Carat Americas CEO and ManiaTV board member David Verklin describes an advertiser flight to quality. "Quality content is beginning to come from the most unlikely places," he said via e-mail. "The Doritos Super Bowl spot/campaign wins a gold Lion at Cannes and costs $12 to produce. YouTube now has hundreds of channels of professional-produced content. Simply put, user-created content is being held to ever higher and higher standards."

Of course, it's hard to ignore the amount of time teens and 20-somethings spend with user-generated content -- and there are exceptions to the assumption that it's not a good ad vehicle.

Case study
Asked whether he thinks there's an advertiser flight to professionally produced video, Videoegg CMO Troy Young said, "I have not seen that." Can advertising work in user-generated video? Videoegg has been selling ads in user-generated video for more than a year. "I know it's doable because we're doing it," he said.

Google's new YouTube ad formats are graphic overlays that cover the bottom 20% of the screen and go away if not clicked after 10 seconds. "This solution isn't necessarily intended for all YouTube videos but on a select group of partner sites," said Eileen Naughton, director-media platforms at Google. YouTube awards partner status to video creators who produce good serial content and abide by copyright rules.

The format was pioneered by Videoegg, which has sold it for more than a year to advertisers such as General Motors, Ford, Unilever and Nestlé. It screens videos to make sure they're safe for advertisers. Plus, Mr. Young added, if you're a young-skewing brand, it's pretty hard to ignore user-generated-content sites, as youth spend so much of their time on them. More recently, entrants such as ScanScout are trying to isolate brand-safe video content.

Different tolerances
In the end, whether or not user-generated video is a viable ad vehicle depends on a brand's risk tolerance. "It's a challenge to lump advertisers into one bucket," said David Cohen, exec VP-U.S. director of digital communications at Universal McCann, whose youth-skewing clients include U.S. Army and Sony. "But we're all trying to figure out on big [user-generated-content] portals what areas are fairly well-lit."

YouTube, for its part, insists it isn't veering away from its user-generated roots. "I wouldn't say the site is necessarily evolving in the sense of leading toward these monetizing partners directly, but users will get an opportunity by joining partner programs to be rewarded like any other content provider," said Shiva Rajaraman, YouTube product manager. "Moving forward, we'll expand that program over time. There's always a home for user-generated content on YouTube."

It's just that, increasingly, the user-generated videos have to compete for attention with professional, premium content. Notably, a music video from Avril Lavigne is beginning to approach Judson Laipply's "Evolution of Dance" as YouTube's most viewed video.

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