IP Democracy: Google Brings Ad Expertise to Video Clips

Google may be struggling to land YouTube video distribution deals with entertainment giants such as Viacom and CBS, but the online ad innovator is still gaining traction in the online video business. But, unlike the action it’s trying to start with YouTube, Google’s latest video victories are much closer to the company’s core competency of relevant, targeted advertising.

As today’s New York Times reports, Google has deals with Dow Jones & Company, Conde Nast, Sony BMG Music Entertainment and new upscale broadband network LX.TV to distribute those companies’ video clips across thousands, if not possibly tens of thousands of, web sites.

The videos appear in Google’s standard ad boxes that have, to date, been almost solely used for video advertising alone. But instead of allowing users to watch only video ads, the boxes are filled with relevant programming content that is preceded or followed by the contextual video ads. For example, Young Money, a web site aimed at, well, young people with money, has this ad box from Google featuring a video on cross-country skiing from LX.TV, a broadband video network aimed at…young people with money. The mini tutorial on the winter sport is followed by a video commercial for Research in Motion’s Blackberry.

With a third party now a participant in the advertising transaction, the revenue generated from these clips is split three ways — Google, the video provider and the site owner each get a slice of the ad revenue. Because most, if not all, of the video content providers will be savvy in the ad businesses themselves, Google apparently is willing to cede control over the ad sales, at least some of the time. MTV Networks (a Viacom-owned company) apparently got to sell the ads that accompanied its video content in a test of the new distribution service that Google ran last fall.

Posted by Cynthia Brumfield on February 26, 2007 9:21 AM to IP Democracy