Google Gives Advertisers Another “In” On YouTube

In a move that investors and marketers alike should applaud, Google's figured out another way to make money off the site it bought for $1.65 billion three and a half years ago.  Today, Google explained that it's come up with a tool to help small organizations advertise on YouTube.

Emily Williams, a member of the Inside AdWords team, explained on the corporate blog, "[W]e're announcing another new feature in Display Ad Builder that lets advertisers use simple templates to create InVideo overlays and companion ads on YouTube."  (FYI: "An InVideo ad is an animated flash overlay that appears at the bottom part of a video that a user is watching.")

Williams later continued, "Now, any advertiser can use Display Ad Builder to turn their image ads into overlays and run a campaign on YouTube in minutes.  Depending on the type of campaign an advertiser wants to run, overlays can be bought on a CPC (Cost Per Click) or CPM (Cost Per Thousand Impressions) basis, and can be matched to YouTube videos based on numerous criteria (like demographics or content categories), or even on a video by video level."

This could prove to be a very popular option, considering that takeover ads on the YouTube homepage are said to be sold far in advance for hundreds of thousands of dollars.  And the move also earns points for being low risk, since it probably didn't take much in the way of resources to execute and doesn't cut any privacy corners.

Now we just get to guess how much Google will actually make from the new feature.  One slightly relevant note: earlier this month, a Citigroup analyst estimated that YouTube will pull in about $1 billion in gross revenue this year.

Facebook Hogging The Internet

Facebook has a lot going for it lately. They’ve got more than 250M users worldwide, they’re the most popular social network in almost every country in the world, they’re hiring in a down economy, and according to a new comScore report, 8.2% of all Internet ads are served on their site.

But, then, maybe this all makes sense. Since Facebook is so popular, it’s not entirely surprising that they serve one out of every twelve online ads. Even better? At least some proportion of their on-site CPC ads lead to another page on the site—so they’re getting money and traffic.

This isn’t a recent development, of course—we’ve all seen ads to “Become a Fan” of something on Facebook. But as smart as it sounds to make your advertisers pay for generating traffic to your site, the underlying logic is pretty much a stroke of genius:

Facebook is an Internet unto itself.

Facebook has long been accused of being a “walled garden”—with its fan pages, apps and other utilities, FB is almost a subset of the offerings of the Internet. If your brand is prominent enough, you’re on Facebook (or you should be!). Driving paid traffic from a personal page (personal) to a branded page only makes sense on that kind of paradigm.

Of course, that kind of advertising is good for advertisers, too, or they wouldn’t do it. JCPenney went from 22,000 fans to 500,000 fans with these advertisements in the run-up to back-to-school shopping (though Bloomberg didn’t say if JCP saw increased revenue from this).

And something seems to be working for FB, too. Last month, Bloomberg said the most popular social network in the world should post at least $500 million in revenue this year.

What do you think? Is Facebook a subset of the Internet, and is internal paid advertising a natural extension of that mentality? Can Facebook sustain this kind of revenue?

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eBay Affiliate Program Goes from CPA to CPC

eBay has announced "Quality Click Pricing" for the eBay Partner Network affiliate program. The company describes this as a new payout structure designed to further reward affiliates who drive incremental transactions on eBay, and who send "value buyers" to the company's sites.

Essentially, the program will now run on a cost-per-click basis, as opposed to a cost-per-action one. Affiliates can get paid for sending quality traffic to eBay, even if that traffic isn't making purchases.

"The price paid per click will still depend on the short-term and long-term revenue of the traffic that the publisher drives to eBay, but will now also take into account the incremental value of that traffic to eBay, i.e., whether a sale happened as a direct result of the publisher’s actions," explains Steve Hartman of the eBay Partner Network. "The greater the incremental revenue and the higher the expected lifetime value of the customers an affiliate sends, the higher the EPC and total earnings the affiliate will receive.  Earnings Per Click (EPC) will be set daily for the previous day’s traffic."

eBay says Quality Click Pricing will simplify the commission structure, and that the payout will be more closely aligned with traffic quality. In addition, the company says publishers will be rewarded for "multiple sources of value in addition to sales." This includes revenue from advertising on eBay pages and PayPal transaction revenue.

eBay's new model for its affiliate program will take effect for new members beginning September 1st, and for existing members October 1st. There is an FAQ (pdf) document available on the subject.

The Ups and Downs of Paid Tweeting

Update: Izea has launched thier paid tweeting service (discussed in the original article) on its own site at SponsoredTweets.com.

Original Article: Will advertising kill Twitter? Probably not, but it might kill the popularity of the Twitterers tweeting the ads if some consideration isn't put into it.

The concept is nothing new. Don't like the ads you are getting in an email subscription? You'll probably unsubscribe. Don't like paid posts on a blog you read? You'll probably stop reading. I don't see why the same principal wouldn't apply to Twitter.

Word is that popular blogger Perez Hilton is making big-money deals to do some paid tweeting. Some will be quick to point out that this kind of behavior will ruin Twitter, but really, it will just piss off Perez Hilton's followers at worst. If it pisses them off enough, they'll just stop following him. At best, he is selective with his sponsored tweets and does not alienate his audience, and makes some nice bank while he's entertaining his fans (not that he isn't already doing that).

Here's some stats about Hilton's blog audience from his own advertising page:

Perez Hilton averages 250 million impressions and 10.5 million unique readers per month.

    * 88% female
    * 9% age 18-20
    * 70% age 21-34
    * 14% age 35-45
    * 90% have attended college
    * 60% earn $60,000 or greater (HHI)

On Twitter, he has 1,008,960 (at the time of writing) followers. And look at what Facebook and Twitter have done for his traffic. It's no wonder sponsored tweets from him would be attractive to advertisers.

Of course there are others out there doing this already. Heard of PayPerPost? Izea, the company behind that offers services where advertisers can pay for sponsored tweets, complete with unique tracking URLs and everything. Marketers pay for Twitter advertising campaigns on a Cost Per Click (CPC) basis.

Izea says its sponsored tweets are all marked with the hashtag #spon. This can lead to scenarios like this where many people are retweeting sponsored tweets:

Could this annoy followers? Sure. You're taking your following into your own hands when you go the sponsored tweet route. I don't think this will ruin Twitter for the followers as much as it could for the ones tweeting the sponsored links if they are not considerate with their sponsored tweets. It's a reputation issue. Do you want to be known as the guy pushing ads on people all the time?

Quality and audience factor in as well. "Sponsored" often comes with a negative connotation attached to it, but it isn't always a negative, even from the reader's point of view. If you are tweeting a sponsored link for a something your followers might actually be into, I don't see why they would mind.

Choose your tweets carefully. This is a good rule to live by sponsored tweets or no sponsored tweets. And if they're sponsored, you better mark them as such, or you are bound to alienate people. I'm not sure where the FTC stands on paid tweeting, but that could be a whole other set of problems.

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