YouTube is considering adding very short (3 second) pre-roll ads before each video plays, but that may not be a good idea, according to MediaPost.

A Harris poll says nearly 3/4 of YouTubers would use the service less if they introduced pre-roll ads. It makes sense that a 30 second ad is too long to tolerate if you only want to watch a 2 minute clip.

So how does YouTube make money without driving away its audience?

One idea would be to use pre-rolls intermittently, say between every 4th or 5th video, and base the ads on the demographic information collected during registration. Registered users could see fewer but more relevant ads, encouraging people to sign in. Or they could run the ads at the end of the video, but that likely wouldn't generate interaction sufficient to satisfy advertisers.

Another option would be to include some links to video ads on the pages that are generated after a video is watched. Big brands could tease the ads for soft drinks or jeans with suggestive descriptions, or promise special discounts. If nothing else consumers would be exposed to a banner ad equivalent.

Video advertising is a new medium and requires creative thinking beyond running the 30 second TV spot. The potential for tracking viewers and interactivity that is not available on TV, requires something more.

The afternoon Technology Enablers session had a couple interesting company focuses.

Click Forensics CEO Tom Cuthbert, got on stage and threw out some paid search and click fraud stats. As the author and editor of the best PPC blog I found these particularly interesting.
Click Forensics estimates that 14% off all clicks are what they consider invalid. Thats a 20% growth over the previous years and what click forensics estimates is a $1 BILLION per year industry. When I posted about Click Forensics and their click fraud study I wanted to see data from search and content networks broken out, and Click Forensics delievered. Obviously they are avid readers of PPClab because they have broken out the two networks where they have found 20% of content networks clicks are fraudulent with keywords with a CPC higher then $2 being 20% more likely to experience some sort of fraud. Click Forensics is on the verge of some ground breaking data, and if you want to help them you can sign up with CF at JoinTheNetwork.com

Najam Kidwai and Real Time Content provided us with a look at some impressive video advertising solutions called Adaptive Media. Their software allows advertisers to create different variations of their commercials and based on your demographics and the data in the cookie set on your computer you will see a version of the ad best fit to you. The example Najam used was a video ad preview for a movie and how the clips would be adjusted for ayoung male to show more sexy clips of the actresses and vice versa for females. Its a very powerful tool that advertisers will use to maniuplate us even more.

SpiceWorks Co-founder Jay Hallberg, brought us one of the more creative solutions that I have seen all conference. They provide a super-targeted niche software for small business "IT Guys" that is designed to make their jobs easier. Their software is free but ad-supported and with this niche controlling corporate spending for their IT departments, it is a great place to advertise products focused towards this demographic. I think of it as a way to get your hands into some of that corporate budget budget. SpiceWorks.com

NewsGator Technologies announced a distribution network that enables publishers to integrate video content onto their sites via RSS. The Video Buzz service enables publishers to select or automatically be fed videos from sources including CNN, YouTube or ComedyCentral.

NewsGator said the Denver Post is among its clients, but the company didn't mention anything about cost or if advertising would be a part of the mix, which it should be. Video will become an increasingly important part of the content mix, and establishing a distribution network early could give NewsGator a lead.

Google says video distribution will be an integral part of its AdSense mix, so expect them to be the biggest fish in this space.

RSS adoption should increase with the introduction of Vista and Internet Explorer 7 that can recognize RSS feeds, but RSS (and therefore RSS ads) would gain traction much faster if Microsoft integrated an actual RSS reader with IE. We'll see more advertisers taking advantage of RSS as people increasingly use readers to focus their online browsing activities.

After a few too many pastries and the mobile session, I began to lull into a confectionary coma. That was until Pando came up on stage.

Pando got my attention. At first look it looked a lot like FolderShare but its much more and I really like it. Pando is a way to share files and folders over a backend peer-to-peer network with great speed. Pando is a standalone app that easily lets you share files with others but also gives you the ability to send 1gb files via email and IM apps. Currently, Yahoo Mail, Aol Mail, Hotmail, Gmail, and Outlook are supported email applications.

The panelists seem to nto be as impressed as I am but I think it could be a great next generation app. We will eventually get tired of looking at low quality, small files via YouTube and will need the technology to support sharing high-def large format files. Pando could be it.

The highly controversial "advertising company", PayPerPost, had their CEO Ted Murphy speak. He went over the basics on how PPP works (without mentioning the Search Engine benefits) and he was not well received by the panelists, more specifically Andy Plesser who warned all brand marketers to be careful when it comes to paying bloggers to talk about your products.

The discussions have been made all around the blogosphere regarding how ethical it is for bloggers to pimp products but not many people have come out to say what it can do from a brand perspective. I believe that many smart brand managers will stay away from this type of marketing just because of the potential issues that can arise from something paid blogging. But there are tons of other advertisers out there who do not care about crossing that fuzzy ethical line and will help PayPerPost type companies thrive.

The prevalent theme throughout the conference 2007 is the year of the video advertising platform. I maybe short sighted but I only see video's main function being a branding tool and not an ROI driver.

So I was looking for Andrew and found him schmoozing yet another person (that's why I'm glad he works for us and not for the other guys) and Dmitry Shapiro of Veoh came over to say hi. I vaguely remembered Veoh but couldn't tell you what they did or where they were and much less, who Dmitry was (their CEO). Of course everyone knows I'm a sucker for new applications of technology, especially when they intersect with marketing... So as Dmitry showed me some of the key points about veoh, I started getting excited. I asked if he had gotten any play on TechCrunch or with Giga and he said that Om liked their stuff but Michael Arrington wouldn't give veoh the time of day (Arrington may have a mental block or other reasons for not mentioning them but either way it's inconsequential).

Let me break down Veoh, why I like them and why you're going to be hearing a whole lot more about them in the coming months.

1.) Look at their alexa rank. They're in the top 1,000 sites and killing Brightcove in traffic.

2.) Their traffic is huge but that's only part of the story. They use p2p to some extent and have their own platform so a huge portion of their traffic doesn't even get picked up on veoh.com.

3.) You can submit your videos to Veoh.com and they automatically get added to YouTube and Google Video... do you have any idea how much time that will save marketers? MWW should use this with their new Budweiser SuperBowl commercial campaign.

4.) They have the right board of directors including Michael Eisner of Disney and Time Warner has put some of their money into them. As I was chatting with Dmitry another VC from a well known firm in a ever so neatly pressed VC-esque shirt stopped by to make sure Ari knew he was here at AO Media.

5.) They have a nice client side player that IMO had much better picture quality than joost (because it's baked in and joost is live and veoh doesn't have to be).

There are a number of other reasons I like these guys but for now just take my word that you should get to know them as well.

So Dmitry, thanks for grabbing me and we'll follow up on this more later.

9:30 am – 10:15 am: CEO Showcase: Mobile Marketing & Advertising
DeWayne Nelon, CEO, Ortiva Wireless
Richard Marshall, Rapid-Mobile
Scott Beaumont, CEO, Refresh Mobile
Scott Hamilton, CEO, VoodooVox
Jonathan Medved, CEO, Vringo

I'm sitting here listening to these mobile marketing companies go over what their products do and their demos and while their products are very interesting I wonder how viable they are. Most of these products are some sort of ad demos that require the user to download something with their mobile phone and while in a few years everyone will be downloading on their phones, I personally don't think I'll be using these services unless the data plan on my cell phone becomes a lot cheaper then what it actually is.

Maybe this is another opportunity for Google to take over. Free ad-supported supported cell phones? Data network included? You heard it hear first.

Tuesday, January 30, 2007
8:30 am – 9:30 am: Panel: Are There Chinks in Google’s Advertising Armor?
Moderator: Bambi Francisco, Marketwatch
Larry Braitman, CEO, Adify
Gurbaksh Chahal, CEO, Blue Lithium
Lance Podell, CEO, Seevast
Mike Yavonditte, CEO, Quigo

Google is expected to report 2 billion$ in 4rth quarter revenue tomorrow, so it sure doesn't look like there are chinks in the Google armor.

I think everyone on the panel agrees that there are chinks in Google's Armour but they have the resources to monitor, fix and exploit these chinks in order to negate the negative impact these chinks can have in their advertising armor.

You don't need to beat Google in order to be successful in your niche, just hope they don't enter it.

I think we all agree that Google is aware of what they are and what they aren't but they have the financial resources to be pioneers into other advertising aspects such as video advertising.

Speaking of video advertising, Mike Yavonditte, the CEO of Quigo, eluded to the fact that in the coming months he will be launching auction based video advertising.

The most interesting question asked at the end was "Will Google be the search leader in 3 year?". My opinion, without a doubt. They have established themselves in an ever growing space and there is a lot of room for growth. There will be more search sites but they will have an uphill battle to establish themselves in the search space.

More pics here

The opening session of the AlwaysOn Media conference was one of the most entertaining that I've seen, disregard the fact that this is my first marketing conference, it was good. The theme of this opening session and what I believe will carry on throughout the session is "Surviving the Media Disruption." Essentially this means bringing the awareness of the shift of marketing (see what I did there?) from the old media (TV, print, etc) to the new school (online, blogs, social media, etc). I can't think of a better blog to cover the conference can you?

Those of you reading blogs and staying on top of trends probably assume that everyone is aware of this shift but judging by the conversations I've had already and the ones that I've overheard, this is unchartered-shark-filled waters for many, so these next few days will definitely be interesting.

Check out AO Media's 100 and let me know who you think will Survive this Media Disruption

Watch AOmedia Live on the web with their new webcast

I posted some of my pictures on flickr in my AlwaysOn Media set which I hope to be updating throughout the week.

AlwaysOn Media Conference NYC

I woke up at 4:45 this morning to a ringing alarm clock and Shannon nudging me to wake up. Why was I getting up so early you ask? Quite simply because I was going to the AlwaysOn Media Conference. The GoingOn network first caught my eye in a big way last year when my friend Eric Rice was blogging from the AlwaysOn Hollywood event. An even in which Hollywood and Silicon Valley collide in a good way. So when Kathy from AlwaysOn contacted me about covering the Media conference in NYC I lept at the chance. Not only did I leap but I brought out Andrew Shotland (formerly of InsiderPages) and Evan so there will be plenty of coverage on MarketingShift. Expect several posts throughout the day each day through the end of the conference. I'll be ducking out a bit early on Wednesday because Wednesday is my daughter Piper's 4th birthday and there's no way I'm going to miss that. So consider this my heads up and get ready to meet the disruptors of marketing, advertising, branding and PR (aka the new media) via mshift over the next couple of days.

The event begins tonight with a 6:00 session on surviving the media disruption and will feature Moderator: Bill Cleary, founder, CKS Partners, Eric Hippeau, Managing Director, Softbank Capital, Peter Hirshberg, Chairman, Technorati, and Steven Yee, SVP, Reuters. Shortly after that at 7:30 - 9:00 there will be a AO Awards and Reception. Should be an action packed evening and I'm looking forward to catching up with several people during the event.

So thanks to Tony Perkins and the AlwaysOn team, can't wait to see what you have in store.

For everyone who thinks that he or she could be the next Darrin Stephens or Wieden + Kennedy, AdKafe has created a portal that enables the public to create advertisements and get paid by the companies.

AdKafe seeks to marry companies looking for ad writers with creative professionals and amateurs who can author video, audio, graphical or textual ads. Companies pay $75 or more to advertise for "ad wanted," and they can choose which of the ads they like best, and pay just for it.

I like the idea of user-generated ads to build awareness, but expecting people to create ads on the hopes that they might win a lucrative deal won't cut it. This model works for contests about unique products where a substantial prize is offered, but expecting quality work on spec is too much to ask.

AdKafe should make the potential ads viewable to the public sans registration, and should be creative in luring potential marketers. So far the company has registered 18 ad companies and 34 potential ad developers, but mass market success requires more creative thinking than their launch strategy suggests.

YouTube will start paying people who upload videos that get generate lots of traffic for the company. YouTube co-founder Chad Hurley was speaking at the World Economic Forum in Davos (surprising in and of itself) and said that the company was forming a plan to share ad revenue.

"We are getting an audience that is large enough to give us an opportunity to support and foster creativity through sharing revenue with our users," said Hurley, as quoted by The Independent. As I've said before, sharing revenue was a must for YouTube to continue its growth.

Starting to get an audience that is large enough? YouTube had 38 million visitors in December; they were at the monetizable (should I trademark this?) level of audience a year ago. The problem wasn't the audience size, it was the lack of advertising infrastructure.

YouTube and parent Google still have work to do to starting attaching a few nickels to each download stream. For now you can spend hours on YouTube while watching nary an ad, and this doesn't bode well for people who hope that YouTube's generosity will allow them to quit their day jobs.

It will be interesting to see if YouTube starts a tiered payment system (50,000 streamed videos as a minimum?), and where the ads will appear (pre-roll? display ads?).