After much speculation over how Google will turn its purchase of YouTube into cash, today the company is rolling out a method for displaying ads on its videos. Unlike the "pre-roll" ads you find on most Web videos -- a 15- or 30-second spot that precedes the video you want to watch -- YouTube's ads will take the form of clickable text overlays that appear briefly during the clip.
If you click on the ad, the player will show you the spot, and will let you continue with your video afterward. The ad will flash off the screen after 10 seconds if you ignore it.
Google tells Search Engine Land's Greg Sterling that the text overlay ads are preferable to pre-roll spots because they don't turn viewers off; Google says that its research shows that lots of people abandon videos if they're forced to watch an ad first.
For now, YouTube will only run ads on videos produced by its media partners -- the videos that people submit won't play any ads. Google plans to charge advertisers $20 for every 1,000 displays of an ad; Google will split the money with the video's producers.
But what about when Google decides to run ads on "user-generated" videos? Thorny issues await, the first of which is copyright law -- will Google's ad mechanism be able to decide if a user's video is legal? The second question is what Google owes to its submitters.
A number of YouTube's rivals offer people a cut of generated ad money in return for submitting videos -- those Mentos/Diet Coke guys, for instance, made $30,000 from their videos on the video-sharing site Revver.com. If YouTube did the same, people could make a great deal more.
For example, since May, nearly 15 million people have watched the riveting YouTube video of a battle between lions, buffaloes and a crocodile, shot by David Budzinski at Kruger National Park in South Africa. Say that a company decides to buy ads on that footage (maybe the city of Buffalo in a branding effort?). At $20 per 1,000 viewings, the ad rakes in $300,000. If YouTube gives just a third of that to the photographer, he has struck gold -- a very productive eight minutes.
Of course, not every YouTube video garners millions of viewers. But the mere possibility of loads of money available for any of our videos might change the site, and perhaps even the culture. We may all become paparazzi, seeking to document every moment in our lives not just -- as so many do now -- because we're egotists but also because we're greedy. Should be fun.