• by Tameka Kee , May 14, 2008

With the latest targeting tool from YouTube, companies like Lionsgate have begun to ride the buzz on the video-sharing platform, running their in-video overlay ads on clips that are surging in popularity. Google quietly rolled out the tool on Tuesday, although it had been in development for several months, with Lionsgate as one of the pilot advertisers.

YouTube buzz targeting works on an algorithm that looks at a number of viewer activities, including how many times a video is chosen as a favorite, how favorably it's rated, and how quickly it picks up views, to determine which clips are about to "go viral."

Advertisers can capitalize on the momentum by choosing to run overlay ads on these videos, with the possibility of combining buzz targeting with other options like time of day, gender and category targeting. As with all YouTube products, the ads only run on partner videos--or content from professional, semi-professional and even amateur producers that fit the targeting criteria, and have their express consent.

For some brands, the buzz targeting represents a very unique opportunity, as it expands the total number of videos that they can choose to run content against. While choosing to target by content or geography can deliver precision, it can potentially limit the breadth of a YouTube campaign. On the other hand, targeting by virality can exponentially grow the reach, like in the case of Lionsgate's film, "The Forbidden Kingdom." With buzz targeting, "The Forbidden Kingdom" ads ran against more than 500 videos in the music and entertainment verticals.

"With so many videos going viral on YouTube at any given time, buzz targeting allowed us to reach a very large, diverse audience," said Danielle DePalma, Lionsgate's director of digital media. "(It) was an amazing opportunity for us to capitalize on the most popular videos on the site."

YouTube has released a number of products for brands seeking to run campaigns, including the in-video overlays in early May 2007, followed by the expansion of those ads to the AdSense content network five months later. But finance types--and even some advertisers--have been pushing for Google to roll out a "game-changing" video monetization strategy, ever since the search giant acquired YouTube for $1.6 billion in 2006.

Google CEO Eric Schmidt recently alluded to 2008 being the year that it actually happens. "We believe the best (YouTube) products are coming out this year," Schmidt said, in an interview with CNBC's Maria Bartiromo. "And they're new products...much more participative, much more creative...much more interesting in and of themselves."

Agency response to the buzz targeting rollout was a mix of excitement, interest and tempered optimism.

"This is definitely another tool to use in our bag of tricks," said Armando Osuna, an online media planner at SiteLab. "The other targeting options have been primarily based on content."

Osuna said that combining the buzz targeting info with the geographical click- and view-through rate data that YouTube provides would also be useful for entertainment clients.

"Bands will be able to better plan a tour now that they'll know which cities and fans are viewing their videos," Osuna said. "The same goes for movie studios, as trailers and other advertising could be targeted towards the people anticipating the movie the most."

Court Crandall, creative partner at Ground Zero, agreed. "The ability for advertisers to attach their message to a piece of video people are actively seeking and passing along is a great boon," he said. But he countered that the buzz tracking doesn't detract from the fact that YouTube users aren't particularly interested in ads.

"At the moment, any online advertisement that delays or impedes the enjoyment of online content is perceived as a hassle and an infringement on your Internet rights," Crandall said. "But that will change in the same way that "The Ed Sullivan Show," sponsored by Lincoln Mercury, eventually became "Saturday Night Live" with 246 commercial interruptions per hour. The purists won't like it, but it represents the future."