From the 4A's Leadership Conference

Despite Popularity, YouTube Still Faces Challenges

Google CEO Discusses Monetization, Targeted Advertising, at 4A's Conference

By Published on .

LAGUNA NIGUEL, Calif. ( -- Despite its phenomenal growth rate, despite the way it is changing media and, yes, despite the hype, YouTube has a couple of problems.
Eric Schmidt
Photo: Art Beaulieu

Eric Schmidt

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So said Eric E. Schmidt, chairman-CEO of Google, which owns the video website. In response to a question from the audience following his talk yesterday at the American Association of Advertising Agencies' Leadership Conference, Mr. Schmidt said because of its vast offerings, finding specific content remains a problem for YouTube users. No wonder. He said 10 hours of video are uploaded to YouTube every minute.

But financing quality video is another issue. According to Mr. Schmidt, YouTube and other video sites are not generating as much money from advertising per minute as TV does. "If you measure minutes of monetization on television vs. minutes of monetization online, the minutes of monetization on television are higher. This is a challenge, though not an insurmountable one. The solution that has come up [is] more compelling and more targeted advertising," he said.

As far as advertising subsidizing content, Mr. Schmidt said, "We'd love to do that, but that doesn't scale." He added that he hopes to get the YouTube challenges fixed "very, very soon."

Hope for Google
As for the online behemoth he leads, Mr. Schmidt said his hope is that one day a Google search will turn up "exactly the right answer with exactly the right ad." His fantasy would be the ability to guarantee for the advertiser a sale with the search. It would, he said, get marketers to change their view of advertising as an expense.

Mr. Schmidt was one of a number of speakers from outside the industry to address the conference, most of whom where optimistic about the future of agencies despite this tumultuous -- or renaissance, as some chose to call it -- phase in the industry's history.

"This whole conference is about confusion -- this choice, this choice, this choice, how do I do this, how do I do that?" Mr. Schmidt said. Marketers "need agencies' help," he added. "This is so obvious." Additionally, he said, Google can help agencies in that it provides analytical tools that will give agencies a framework in which to talk about those choices.
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