Friday, February 15, 2008

Is There Anybody Out There? Part II

I recently wrote about and its financial difficulties, arguing that a content provider must be able to track viewers to be successful with advertisers.

I would say the ability to track viewers becomes more important as the audience size decreases. When an advertiser runs a commercial on broadcast television, the audience is measured in the tens of millions, so the information from Nielsen is good enough. Perhaps one can maximize the impact by running ads for men's products during football games and women's products during Oprah, but an advertiser still relies on the odds that out of a pool of millions there should be enough relevant eyeballs on the ad.

When the audience is measured in tens of thousands, that calculus changes. Advertisers need to be able to track who is watching so they can measure ROI through actual conversion rates: who watched the content then bought the product or service.

Ian Schafer blogged about the YouTube Videocracy Event. He commented on YouTube's quest to make more metrics available to advetisers, to avoid revver's fate.
But the real news was YouTube’s announcement of an impending launch of
advanced analytics tools. You’ll be able to see where video views are coming
from (geographically and site-wise), as well as many other data points. This
will be a huge help to advertisers trying to extract more success metrics and
data from their YouTube efforts.

I have written before about the extraordinary potential for YouTube to break the hegemony of the relatively small group that produces entertainment content for broadcast television. If people can watch YouTube in the comfort of their living rooms, I believe the effect would be the same as the printing press breaking the monopoly of a relative few who controled what written material was suitable for mass comsumption.

Since the printing press gets some credit for the Protestant Reformation, the effects of egalitarian video entertainment on society could be extraordinary.

But before any of that happens, somebody has to make the business model work.

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