• by Tom Hespos , September 5, 2006

Last week, I pointed to YouTube as an example of an online video business that could have easily sold out to the man, but didn't. The obvious way to monetize a site full of interesting video clips is to disregard the user experience and begin running pre-roll video ads. Certainly there's no shortage of advertisers who are enamored with the idea of running their television commercials online, and there's no question that YouTube could have had advertisers back up the proverbial dump truck full of money.

YouTube deserves to be commended for waving off the beeping dump truck. It would be easy to adopt the pre-roll model, float an IPO, cash out and then move on to the next opportunity a few hundred million dollars richer. But it looks like YouTube wants a sustainable video play here, so they've debuted a model that is more respectful of the user experience. Branded channels will play a big role in this model, and this move is highly significant to the advertising community.

Of significance is the notion that responsibility for ad campaign performance is laid right at the feet of the advertiser. This adds a Darwinian element to YouTube campaigns that is healthy for the industry. The message is clear: Load up a co-branded channel with content that can't stand on its own and you'll waste your money. YouTube may just be the first brand medium where advertisers absolutely must create compelling content. No more firing off quick "buy now" ads and relying solely on the publisher to force-feed the message to the audience. YouTube users are fully in control, and if they don't like what they see, they won't even consider watching it.

I really like this model for a few reasons, not the least of which is that it realigns responsibility for success. YouTube simply creates the platform and gives advertisers access to it. It doesn't take on the responsibility of making sure that people who view the message click over to the advertiser's Web site, or making sure the advertiser gets a certain number of leads. It's really up to the advertiser to make something compelling.

The other big reason why I like the model is that it's going to force advertisers who do business with YouTube to rethink passive advertising. In order to really engage YouTube users, advertisers are going to have to learn online social networking skills, and develop those skills as much as they've developed the ability to produce a funny TV spot. Failure to grasp the social media aspect of YouTube means that a campaign will fail to realize its full potential. If advertisers pay more attention to the development of those skills, it means they'll apply them elsewhere, where they're needed--the blogosphere, on sites like MySpace and on community sites in general. This will help.

I'm not counting on YouTube to save the universe. Far from it. I'm just cognizant of the fact that an opportunity needs to emerge for advertisers that is so significant it forces them to place emphasis on social networking skills rather than on passive media skills. YouTube might be it.

It's not without irony that this lesson might be delivered by a site that is largely thought of as a passive entertainment site. Fact is, though, that YouTube makes video clips about as interactive as they can be, by turning producers of content and viewers alike into social networkers, and by leveraging the viral aspects of the Internet.

Even if YouTube never really changes the world, I'm happy enough that they've waved off the dump truck and cast their vote for the user experience.