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YouTube launches new concept of participatory videos by Michelle Quinn People have wondered how YouTube, the Internet video phenomenon, would cash in on its explosive popularity. Now we have an inkling -- it's a first for Internet advertising, and comes with the help of Paris Hilton. Today, YouTube will announce a new advertising strategy that aims to keep its growing -- but very opinionated -- audience happy while giving advertisers something more than banner ads and contests to reach them. The San Mateo company has created a new advertising concept called participatory video ads. Each day at YouTube's home page, one video ad will be featured. It will rise and fall based on its own entertainment merits, judged by users. People at the site can rate the ad, share it with others, write comments about the ad, embed the ad inside their own videos or make the ad a favorite. The company declined to say how much it will charge for the placement of the participatory video ad on its home page, which has become key real estate on the Internet. The ads are not bought on a pay-per-click basis, however, the company confirmed. In keeping with the YouTube community's ethos that everyone with a video camera can find an audience, some users will surely slam the ad in comments or with their own video response. However, according to YouTube's Chad Hurley, advertisers and their clients say they are up to the challenge. "This is a first,'' said Hurley, YouTube's chief executive and co-founder. "It really allows advertisers to kick start a viral campaign.'' Some industry experts have predicted that YouTube would have to change the culture of its site so that users would accept the very advertising it needed to support itself. Other Internet video sites have hit up visitors for subscriptions, pay-per-view videos or pay-to-upload videos. But those sites are not as popular as YouTube, which had 16 million unique U.S. visitors in July, according to comScore Media Metrix. The participatory video ad, which visitors must click on to view, is one way the company is demonstrating how it plans to do Internet advertising differently. Test of concept Ten days ago, YouTube began testing the participatory video ad concept with a video ad for the current feature film "Pulse,'' by the Weinstein Co. As of Monday, the video had been viewed 904,898 times with 838 comments, mostly positive. One from community member CheFuser was less breathless: "Any movie that cannot make the 90-minute mark has to be CHEAP! Don't see it!'' Another was confused by the trailer on the Internet. "Is it just me, or does it seem a little freaky that this preview is on the computer???'' It is all part of the YouTube experience, and Hurley says advertisers are ready for it. "The advertising community embraces the idea of feedback. Like anyone else within the system, they have the ability to moderate comments so they don't get out of control.'' Up to this point, YouTube's advertising has looked like other popular Web sites with banner ads, promotions, sponsorships and Google and Yahoo text based ads. Since it was founded in February 2005 with venture backing from Sequoia Capital, how the company would fund its popularity has been hotly debated. The privately held company has declined to say how much money it spends a month paying for bandwidth, which makes viewing streaming video possible. Some industry experts speculate that YouTube's monthly bandwidth bill is at least $300,000 to $400,000. Another concept is branded content channels, where advertisers can customize their own space on YouTube and try to lure people to the channel with contests and compelling video content. Some channels might operate as television did in the early days, says Hurley, with the advertiser offering programming as a sponsor. A credit card company, for example, might sponsor a travel channel, he said. The branded content channels are similar to entertainers' pages on MySpace. But rather than making entertainers such as Britney Spears a friend, which one does on MySpace, a YouTube user can subscribe to the entertainers' videos, receiving notification when new ones have been uploaded. Her own channel Today, Paris Hilton will put up her own participatory video commercial advertising her debut album, "Paris.'' People who click on it will be lead to the Paris Hilton Channel where she will update with new videos and added features such as interviews and scenes behind making videos. They can subscribe to her channel and find out videos that she likes. "YouTube's model is much more than opt-in,'' says Mark Kingdon, chief executive of Organic, a digital communications agency in San Francisco. On behalf of Fox Broadcasting Company, Organic placed both video ads and display media to promote the second season of Prison Break on the new branded Paris Hilton Channel. To understand the power of the new medium, Kingdon points to one Sony commercial for its new TV, (link), which has had more than 3 million viewers. "How much money do you think advertisers would pay to get 3 million people to see and comment on your advertising?'' said Kingdon, who declined to say how much. "Where else can advertisers get that immediate feedback? This starts to leverage the full potential of what is very new on the Web, which is a video community site.''

source: http://www.organic.com/about/news_detail.jsp?757

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