How GoogTube Merger Will Change Online Media and Marketing

Read or Listen to Experts' Predictions About Long-Term Impact

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NEW YORK ( -- What does Google's $1.65 billion acquisition of YouTube really mean for the future of online video-related media and marketing? That question has been ricocheting around boardrooms, business offices and bar stools throughout the industry since the merger was announced last week. Ad Age asked five highly respected authorities for their take on the landmark deal and its implications for the world of digital advertising. Read or listen to their answers below.

Rafat Ali

Google did the deal with MySpace and is paying them $900 million. If you think of similar scale and video-ad inventory, which is at a higher CPM than text, you're talking about probably a year to two years to recover that money [spent to buy YouTube] and that should be enough. ... But the other side of YouTube is beginning to emerge ... as a huge marketing vehicle for the whole entertainment industry, signing up with movie studios, music labels and TV networks. ... That is going to be a learning curve for Google because it hasn't really done it. ... The fact that YouTube has that attractive audience, which all of these people want, will force Google to think in that direction.

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Rob Petty
CEO, Roo Networks

Short-term I think that we'll probably see better sorting of the content. The problem user-generated sites like Google and YouTube have had in the past is ... you're not sure what your ad is going to be in front of. The single most important thing to an advertiser is their brand, and they want to be assured that their brand is being displayed in front of what we call trusted content, which is content that is suitable, not overly violent, there's no nudity or obscenities in it. One of [YouTube's] challenges is that it is potentially in a position now where it might be seen as a threat to the large content providers. ... This really starts to take them into the media area where they're competing with a lot of the major cable [channels] and traditional media companies.

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Tim Hanlon
Senior VP-venture, Denuo

I don't think it's about just simply taking AdWords and just putting them into YouTube. This is about how do you take current-generation technology and further radiate video out into the world. In places like search results, AdWords, can you bake in video ads like you bake text into thousands of websites? This is about literally moving video to the next level ... and that should give hope to all these other companies out there that are focused on particular pieces of video model-Revver, Spotrunner, Brightcove, Pando, the Venice project, etc. -- that either they can be part of a solution themselves or as part of the Google hegemony or the Yahoo hegemony or the Microsoft hegemony.


Alan Schulman
Chief creative officer, Brand New World

With video you can really take the richness of a brand's creative and bring it to life. If I sell shampoo and I'm interested in reaching women who want voluminous hair, if that's a word tagged across the video, now I've got an opportunity to link to video that's a little more contextual. It's not just a random preroll. ... Some advertisers-Pop Tarts' webisodes, the "Dear Jet Blue" ads-are doing things that look and feel user-generated but they're brand-centric. The challenge is: How do you get inside the vernacular of that user-generated video? How do you create something fun and a little lo-fi, with less production cost? It's more about short, sweet, crisp and cracks a smile. And if you can do that across content categories at a lower price, that's smarter than cutting down TV spots.

Simon Andrews
Digital chief strategy officer, MindShare

Google's very good at algorithms, looking at a web page and putting an appropriate ad next to that. Video's a different ball game, but YouTube's video is tagged. So Google can use its algorithm, see how people tag these videos and serve an ad that makes sense. ... As advertisers, we might start to choose keywords that are important for our video. So if you have a commercial that's cool and urban, we could say: Here are the five or six key words that really summarize this content, and Google could match an ad with how we describe it.

John Battelle
Chairman and publisher of Federated Media and founder of Wired magazine

There is one very simple fact that makes it possible for Google to buy YouTube over nearly every other possible suitor: Google has a monetization engine right now, which essentially halves the purchase price from the outset. No other suitor has AdSense, which allows Google to be comfortable with its ability to make money off YouTube inventory. Add to that Google's position in the media world as a "switchboard" or distribution player. The company has made it clear it does not want to be a leader in the world of content creation, and [is] therefore an ideal partner for the very media companies who fear YouTube's potential to become both a copyright rathole and a potential content competitor in its own right.

Jeff Jarvis
Media veteran and BuzzMachine blogger

Google won't monetize just YouTube. It will monetize video anywhere it is played on the internet. As TV explodes, we don't need more content or distribution -- we have plenty of both -- but we do need ways to find what we each want to watch. How do we find everything else today? Google, of course. So it's natural for Google to help us find TV to watch, and it will make money there. Google will place advertising on the video it serves. But more important, just as Google serves ads with text anywhere on the internet, it will place advertising on TV wherever it is served -- on our blogs, via peer-to-peer, by distributing big-network TV, or by helping the rest of us share our shows. In the end, we all become producers, we all become programmers, we all become networks, and Google helps us all make money.
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