The Next Web

Project Spaghetti: YouTube might introduce pre-roll ads

Written on July 9, 2008 – 5:19 pm
Ernst-Jan Pfauth, editor in chief

Wall Street Journal has an important web story today, as they’ve found two sources willing to talk a bit about YouTube’s advertisement plans. YouTube only makes $200 million a year with advertising. Yes, “only”, as you might expect a video service with over a billion video views each day to come up with a little more ad revenue. This gets the executives at Google a bit nervous, as they still have to justify the 1.65 billion acquisition. Therefor, they’re thinking of drastic measures - like pre-roll ads all over the place.

One of the - unfortunately anonymous - sources said that a review executed by Google North America advertising president Tim Armstrong had identified an impressive number of 105 problems within the ad-selling division. This review is part of Project Spaghetti, a nickname for the extensive evaluation of the YouTube advertisement plan that will end before or during Q3. Although Armstrong seems worried about offending the audience of YouTube, he WILL adopt pre- and post-rolls. At least, that’s what the secret sources say.

This probably will alienate some of the YouTube users, but most people will just take it for granted. There are ads on TV too.. And this group gets more important, as they’ll become more profitable for Google. So the increasing revenues will make up for the few thousand people that find a different video home.

[Via paidcontent.org]

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advertisement, business model, google, pre-roll ads, The Wall Street Journal, youtube

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Still hope for old-fashioned publishers!

Written on January 29, 2008 – 9:02 am
Tessa Sterkenburg,

Since online user generated content is picking up, newspapers get continuously slashed for their inability to adjust to modern times and the demise of the old media was predicted. Now it turns out that the old-fashioned publishers are still going strong.

Newspapers were late to the game because, for years, they had near monopolies and fat profit margins, and therefore weren’t pressured to innovate. In 2005, all newspapers were still earning most of their profits from the print versions, and young people turned away from papers, leaving newspapers with a declining reader base, and declining revenue potential.

Last week The Newspaper Association of America announced that a record number of readers visited U.S. online newspaper sites last year. The number of unique visitors to newspaper websites rose more than 6 percent to a monthly average of 60 million. Monthly visits climbed 9 percent in the fourth quarter from a year ago.

So, all is going well then and newspapers are finally becoming innovative news sources online. Indeed newspapers are making steps in the right direction. They are embracing RSS feeds and video, ask their best journalists for their online versions, make more content available for free and there is even some collaboration. I can’t help noticing however, that this news comes together with reports that the biggest growth group online today are the baby boomers… coincidence?

Maybe not. The Wall Street Journal recently announced that they will not go along with the trend and hold on to their subscription model. The reason: it pays them good money. Not only in subscription fees but particularly in advertising revenues. Their well-defined paying user group of affluent 50-year old male decision makers turns out to be an attractive group for advertisers. Great model.

Unfortunately, as a new generation of decision makers is approaching, it might not last.

business models, Newspapers, publishers, The Wall Street Journal, user generated content

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