GoogTube: Huge Ad Platform for Small Businesses

The blogosphere is choking on analysis of the Google-YouTube deal. I will not add to the noise. But I will suggest you stop reading everybody else's opinion and see for yourself at least one element that may have persuaded Google that $1.65 billion was somehow reasonable.

Start with the understanding that, as Andy Kessler blogged, Google (GOOG) is an advertising shark.  It needs to keep moving forward, growing its audience, to deliver nourishment to its advertisers.  Kessler seems to believe, by the way, the YouTube deal is a sign of trouble in the Googleplex.  (You can read his thoughts after you finish mine.)

So, if You Tube can give Google 100 million more page views a day, Google will fill them with ads.  For instance, you want to search for video that spoofs the Von age TV ads, chances are, in a Google-ized You Tube world, you'll also see text ads pitching Vonage (VG), Packet8 and Sun Rocket.  Further, what's to prevent Von age or Packet8 from uploading their own TV commercials?  So far as I can tell, nothing.  IBM already did it.

Now take it a million steps farther. Television continues to be the number one advertising medium.  But small businesses (which Google and every other search engine keeps trying to reach) can't afford it.  But they can afford video.  It's already happening.

Kristine Partridge, an associate real estate broker in Utah, is uploading her own video commercials, to YouTube.  So are members of her team.  The spots look like they're produced in a conference room, with the camera balanced on a few books, and pointed at Kristine.

"Bungletronics" used YouTube to market his six-year-old car. Home video equipment, a little software, and he's on TV, sort of.

In other words, YouTube.com is already being used for marketing and advertising.  Millions of advertisers, already using Ad Words for text ads, now will get the option to run on You Tube pages where they can increase the impact with their own clips. Video is a powerful marketing medium.  Google has an incredible number of advertiser clients.  You Tube has 72 million users a month.

Now, say after me:  YouTube is more than videos of exploding Mentos.

Disclosure: I own shares of Google.

Comments

[kkin365:]

Comments are reassuring. What accounted for GOOG's gyration yesterday? omooc

2006 Oct 11 08:10 AM