October 16, 2006 4:00 AM PDT

What MTV says about Google-YouTube marriage

A recent Google collaboration with MTV Networks may have offered a window into what the combination of Google's online advertising network and YouTube's content will look like.

Google began distributing clips from MTV Networks over its AdSense advertising network in August, in what Jennifer Feikin, Google's director of video and multimedia search partnerships, said at the time was the first, but not the last, syndication deal of its kind.

"It's an amped-up form of AdSense," Feikin said. "We really have high hopes for this test, and we will look to roll the model out to other content providers."

"There are certain types of advertisers that will not be willing to put their commercial in front of YouTube content."
--Emily Reilly, JupiterResearch analyst

While the search giant is staying mum about how exactly it plans to make money off the massive index of videos it's acquiring with YouTube, Google watchers are taking a hard look at the video projects Google has already tackled to gain insight into its plans. At stake, some argue, is the future of online video. If Google, with its wildly successful ad network, can find a way to "monetize" YouTube's viewership, it will point the way for other big Net video companies.

But if the Google-YouTube combo doesn't pan out, that failure could cool investors' fervor for online video, while adding Google to the notorious list of big companies that spent billions to acquire "eyeballs" instead of a revenue-generating company, and got burned in the process.

"YouTube didn't put ads in front of their videos yet for several reasons--namely consumers are turned off by the idea and advertisers are wary of the content," said Emily Reilly, an analyst at JupiterResearch. "Google will have to solve those issues. What may occur instead of that is Google will use something like AdSense contextual ads that rotate through the page but with no in-screen pre-roll (before videos)."

"Advertisers don't have the ability to effectively target ads," Reilly added. "Google will have to solve that too."

For the two-month test with MTV, Google licensed content from the music network and distributed it over select AdSense Web sites, said Google spokeswoman Jennifer Hakes. The video clips had video ads inserted and were targeted to the Web site's subject matter. For example, content from MTV's Nickelodeon programming aimed at children was shown on a site dealing with baby names, she said. The ad revenue was divided between the publisher Web site, Google and MTV.

Hakes said she couldn't say whether the test would serve as a model for the combined Google-YouTube effort. "We're exploring ways to integrate" Google's ad technology and YouTube's content, she said. "We're not ruling anything out."

In another two-month test that took place this summer, Google offered Google Video users the ability to watch an ad instead of paying for some premium content. The ads were shown after the video played, in what is called "post-roll" format, and banner ads were also displayed.

Outside of those tests, Google seems to be sticking with display advertising that appears alongside the content on its Google Video site. YouTube is using display ads too, mostly out of deference to its audience, which likely would be annoyed at having to watch ads before seeing the videos, experts said.

See more CNET content tagged:
Google AdSense, MTV, YouTube, Google Inc., MTV Networks

8 comments

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here come the ads
First let me start by saying that the day Google inserts pre-roll ads before my video content is the day I pull my content and post it elsewhere. I can probably live with ads displayed UNOBSTRUCTIVELY on the page. One of the features of YouTube that I currently make use of is the ability to embed my videos in another site or page. Unfortunately I fear that Google will pull that feature since they cannot place ads that way without a pre or post-roll video.

I'm so sick of advertising. People are inundated with it every day. We cannot escape the advertising littered all over our environment. One one hand I realize that services need to be funded. Users have to realize that they have two options (for the most part): to accept some advertising or to pay for the service. However, there also needs to be balance. The ads cannot be so obtrusive as to hinder the usability and enjoyment of the service.

Just my thoughts. Your mileage may vary.
Posted by herkamur (115 comments )
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agreed
No, I agree with what you are saying. There needs to be a balance, a ton of ads tends to be annoying.

I think the whole content with ads thing will backfire and this is bad for Google as i'm sure this was one of the main reasons why they bought YouTube, hundreds of millions of vidoes to put ads on.

I think when a lot of ads come, people will go elsewhere. There are thousands of startups that just in a few or so will be at the YouTube level.... Web2 is definitely here...
Posted by aSiriusTHoTH (176 comments )
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Lifetime Membership
How cool would it be to get in on the groundfloor of this as a members service?! Yeah you can post free videos but say you want to link to your site?...membership strips leading ads! Or, maybe instead of leading ads they could have trailing ads instead...gives you the option to close it but also plays out if you don't touch anything...I happen to do three things (at least) on my machine and would probably see a few ads at a time... maybe...
Posted by wartickler (17 comments )
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Nice story
wow.
Posted by bcaulfield (2 comments )
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Holy God! What happened to CNET?
First it was the less informative, "but, gee, it's pretty!" interface change, and now the horrendous talkback interface changes!

Notice that there is no way for us to vote on these changes, and for good reason - they suck.

Read it now....it;ll surely be deleted soon.
Posted by Jim Hubbard (326 comments )
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Send in your feedback
It's not voting on the changes, exactly, but you can click here to speak your mind about the new look:

<a class="jive-link-external" href="http://news.cbsi.com/2030-12_3-5869813.html" target="_newWindow">http://news.cbsi.com/2030-12_3-5869813.html</a>
Posted by Jon Skillings (249 comments )
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Monetization of Eyeballs
I was under the impression that Google made some copyright deals with other networks as well and was going to bring YouTube under their copyright umbrella to protect themselves. How does Fox and MTV feel about YouTube? Sure, it was a great site that didn't make money and broke every conceivable Intelligent Property concept on the books...can Google bring it into correction? I would think that ANY monetization of YouTube is a step towards making it a legitimate video site. Yahoo! and MSN are the only other real contenders in the video arena and they both apply advertisements to their video lines.And, Google is now in a position to steal the show with the number one AND number two slots handled. I like Google for this and all the other companies it's acquired. Smart move to conglomerate one and two into the absolute king of video. Booyah!
Posted by wartickler (17 comments )
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I'm convinced GOOG will opt for post-roll..
..beyond all the licensing &#38; copywrite mumbo-jumbo which you know GOOG's legal team has already addressed pre-purchase of YouTube, the issue boils down to sticking with the single key feature GoogleVideo AND YouTube offer which differentiates them (and MySpace for that matter) from MSFT &#38; YHOO's product: click and link without an annoying pre-roll ad. Yes, they'll probably monetize this by sacrificing the degree of ad revenue in favor of the far more attractive post-roll. Users can watch the show and kill the damn post-roll ad.

I suspect GOOG's next eyeballs buy may well be MySpace. The strategic relationship between them is strong to begin with. I would've liked to be a fly on the wall at the Schmidt/Murdoch meeting behind closed doors last week. We can rest assured that the two kings of their domains need not have met mano a mano about any old business matter.
MySpace won't come cheap like YouTube did for the obvious reasons. GOOG is paying for all of these assets in stock anyway, so it's quite not the "huge" cash price melodrama issue ppl are making it out to be.
Posted by i_made_this (302 comments )
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