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Schmidt Promises New YouTube Monetization Tools

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It’s all smoke and mirrors until the products launch, but Google CEO Eric Schmidt promised untold wonders of coming YouTube advertising innovations — “not just putting in-line ads in the things” — in an interview with CNBC’s Maria Bartiromo that will air at 4 p.m. ET today.

Schmidt emphasized that the yet-to-launch ad products would be targeted, saying making money on YouTube would be “our highest priority this year.” He also said something unclear about how Yahoo is trying interesting things in online video advertising too. However, we recently got a demo of Yahoo’s new video ad formats: “clickable” and “interactive.” Update: A YouTube spokesperson said he believe Schmidt misspoke, and meant “YouTube” when he said “Yahoo.” It’ll make more sense when you read the transcript below.

Here’s the relevant portion of the interview transcript, as sent in an email by CNBC:

BARTIROMO: Let me ask you about YouTube and MySpace. YouTube has these phenomenal growth rates. What do you think is behind that?

Dr. SCHMIDT: Video is powerful. And it’s amazing. You know, we started off with Mentos and the other sort of fun videos, and now people, because they have so many digital cameras, are essentially uploading everything. Furthermore, we’re beginning to see glimpses of significant professional content on YouTube. People are using it — because there’s such a large reach, they’re learning how to reach that audience. We’re working but have not yet in my view gotten a breakthrough around monetization. So while we have lots and lots of traffic and we have lots and lots of interesting and creative people and all sorts of controversies — we’re blocked in countries, so on and so on — I don’t think we’ve quite figured out the perfect solution of how to make money, and we’re working on that. That’s our highest priority this year.

BARTIROMO: Which is a huge priority, clearly. A lot of people feel like this is an amazing opportunity for you. So, as far as monetizing that business on YouTube, do you think that takes a year? Does it take the next five years? What’s your time frame on that?

Dr. SCHMIDT: We believe the best products are coming out this year. And they’re new products. They’re not announced. They’re not just putting in-line ads in the things that people are trying. But we have a number — and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more — much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.

BARTIROMO: They want to look at them.

Dr. SCHMIDT: When they’re targeted. When they’re the right ad for what you’re doing or what you care about.

14 Responses to “Schmidt Promises New YouTube Monetization Tools”

  1. I watch YouTube very closely for marketing reasons and they are literally shifting things every other day. certain videos I have placed fly around the results in Google for key terms, but also shift my niche video’s around for key phrases within its own search function.

    Just as you think you have worked the algorithm, it changes! =0>

    Cool! It keeps me on my toes!

    Best wishes


  2. With search, Google have an inbuilt and obvious mechanism for knowing what topic interests a user. The simple fact you’ve searched for something is an indication of interest and provides Google with the ability to target advertising accordingly.

    With video, things are not so clear cut; and searching for/watching videos that mention a certain phrase (for example: Vacation) is very unlikely to indicate that the user is a hot lead as a prospective travel buyer. For Google to try to serve ads that are “targeted” and therefore the right ad for “what you’re doing or what you care about” they will need to either rely on wisdom-of-the-crowd metrics similar to ours, where we track measurements of user engagement with particular ads in particular content and adjust our prioritization according to which ads those viewers of particular content respond best. OR, they may surprise us all and try to do an individual-focused cookie based behavioral engine; tying YouTube ads with your previous searches on or even go as far as to tie it into the huge wealth of data they are now accessing from DoubleClick. If they go down that route, it will be interesting to see how users respond and if there are any privacy advocates that suddenly cry foul when they realize how much information Google is able to collect and leverage…

    Either way, I think we can be sure that Google will do something very smart and interesting.