Brand display ads will be “the primary driver of monetization for video,” YouTube CEO Chad Hurley said tonight at an tech startup dinner in Palo Alto, but he went onto lay out an argument that there’s also a growing opportunity to make money from direct response affiliate deals. YouTube may even explore making products clickable within videos, he added.
“We’re integrating links to iTunes and Amazon for DVDs, CDs, and digital downloads,” Hurley said. “A lot of our content does drive awareness for music or for TV shows or movies, and a lot of our partners are really just excited to make that connection between the two — going from promotional, getting people to tune into a TV show or buy a movie ticket — to that direct response in terms of clicking to buy something.”
What he was describing are the Amazon and YouTube buttons first spotted in February of this year by Googlified in YouTube’s CSS file. I thought I’d seen them live on YouTube recently, but I can’t seem to find an example at the moment.
Hurley then described a potential extension of the company’s current in-video ads that would allow for product placement.
“That becomes even stronger as we experience that in the player itself, and maybe at some point it makes sense to have something identified to click within the video space — it may be a little bit too random, and the user may not understand it in a good way — but I think linking to products and services, that’s a big opportunity in terms of direct response.”
Many companies, such as PLYmedia, Overlay.tv, Asterpix, and VideoClix, are trying to do this, but none with the video library or reach of YouTube. It’s always possible that YouTube would look outside for a technology solution, but that’s not its habit. I asked Hurley for more detail after his talk, but he said he had to play coy.
Google CEO Eric Schmidt had previously said publicly that making money from YouTube would be “our highest priority this year.” I asked Hurley whether Schmidt meant the highest priority for YouTube, or for Google as a whole. “I’ll have to ask Eric that,” he replied.
The main point of Hurley’s speech at the event was to tell entrepreneurs the story of how YouTube came to be. Look for a video of the full talk coming soon.
Photo by Brian Solis.