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[qi:004] Google’s (GOOG) new initiative to distribute YouTube videos through their AdSense network, wrapped and nicely packaged inside AdSense ads seems to be such a big deal, but it really is not. In fact, it is not quite smart, and shows that Google is still struggling to figure out how to make money from its YouTube acquisition. And that doesn’t change with this new effort, which in my opinion has four major challenges.
1. Google will share the AdSense $$$s with video creators and web site owners (who place the AdSense-boosted videos on their sites.) Is this going to get video type CPMs or the same pennies you typically see on an AdSense ad-unit? This won’t add up to much if it is the later.
2. The program is limited to some specialized video content creators, as the New York Times points out.
3. The new offering will match content of the video and the website the AdSense units. Given the debatable accuracy of AdSense just in text ads, I am skeptical of this claim.
4. How about website visitors: will they really care of these video AdSense units? Text ads worked because they were less intrusive than the monstrosities that passed for display ads back in the day. Video-enhanced AdSense seems to be a rerun of that story!