Remember back in the day when you gasped “$1.6 billion for YouTube!?!” “Where’s the AdSense of audio and video?” was what I wanted to know in October 2006, the week after Google bought YouTube. A year and a half later Google is taking the obvious and necessary step to profit from what it’s learned on YouTube: releasing contextual video ads for the entire web [that URL isn't working yet, but it's the one Google gave me].
Google will make the InVideo ad formats it developed for YouTube last year and extend them to its publishers and advertisers. The overlay ads will be targeted to both the content of the video and the site it’s displayed on.
Yes, video AdSense is late in coming — just like YouTube’s copyright protection scheme was last year. To be fair, figuring out what’s going on in a video, whether you want to monetize it or protect it, is hard — Google had to break a sweat on both these products. Till now the company had made oddly limited forays into web-wide video advertising: syndicating videos (including YouTube partner videos) within ad units.
Thursday Update: Lots of more info coming out on this story, so I started an addendum post.
Meanwhile, plenty of startups have emerged to fill the contextual video advertising void: ScanScout, Digitalsmiths, adap.tv, EveryZing. But Google isn’t going at this alone. At launch, it has signed an impressive list of partners for its video ads, including UGC, professional, and enterprise portals and platforms, but most interestingly other video advertising companies such as YuMe and Tremor Media.
YuMe CEO Jayant Kadambi, whose company will throw Google into the mix with other pay-per-performance providers, called the video AdSense offering a “powerful new avenue” for revenue.
Other named launch partners are how-to video sites BobVila.com, eHow, ExpertVillage, as well as My Damn Channel, PinkBike, TheNewsRoom, Revver, blip.tv, Brightcove, GodTube, and Eyespot Network. (Likely candidates that I was surprised not to see on the list Google provided are Ooyala and Howcast; the video platform and how-to site, respectively, were both founded by former Googlers.)
Paradoxically, while Google may be late to market, in the meantime it has done its part to make the market smaller. The company increases its share of the video market every month — at least in the U.S., where comScore reports Google sites (mostly YouTube) stream 32.6 of videos watched online, and host 43 percent of people who watch video online.
At the same time, while other generic video aggregators (e.g. Revver, Bolt) may be falling by the wayside, that doesn’t mean there’s any fewer new sources of video online. Legal streams of TV shows, for instance, are booming. Let’s see if Google can get a piece of that.