Media buyers can choose to purchase inventory on video sharing sites that offer the best environment or they can go with a site that helps them leverage metrics towards a better media buy. With Google’s Q3 just behind us and a Hulu IPO on the horizon, it seems worthwhile to ask which one of these two companies will own the future of prime video inventory. That’s still an open question; and of course, any number of third players could come and take the reins. But what’s important to understand is that Hulu and YouTube represent not just an epic battle of networks, but a fundamental conundrum in digital media buying. And that conundrum is about metrics.
But before we get to the future, let’s start with a look at the present -- which Google / YouTube seems to own. YouTube, the world’s most popular video site, rakes in an estimated $1 billion of the entire $2.2 billion digital video ad market, double Hulu’s internal prediction of $500 million for 2011. YouTube and Google’s dominance in viewership is unparalleled, too, with comScore ranking “Google sites” at six times more viewership than that of Hulu, and the highest video viewership levels on the Web. And it’s not just a site for one-off video clips of dancing cats, either; just ask Lucas Cruikshank, whose YouTube channel has been viewed nearly 120 million times, and has spun off into a feature-length film produced by Nickelodeon.
Of course, one quick look at Lucas Cruikshank’s creation, the unbearably grating Fred Figglehorn, or at similarly popular YouTube presences like Annoying Orange, and you’ll instantly be reminded that YouTube still hasn’t reached the brand strength of Hulu. Hulu is still the place for prime content like “30 Rock” and “Desperate Housewives”; YouTube is the place for varying stages along the long tail of video content. That could change, of course, and YouTube could become the next HBO. But that’s hard to imagine, especially as that kind of transformation would probably require YouTube to eschew its long-tail stuff, which is also its cash cow.
What does all of this have to do with metrics? A lot. Because while YouTube doesn’t offer the best content, it is tied into the world’s biggest ad network of Google/DoubleClick. And when you layer topnotch targeting and optimization data on top of middlebrow and lowbrow content, that so-so inventory starts to become a lot more attractive.
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