In what has to be the second most brilliant move the team over at YouTube has cooked up (the first being letting Google fight their legal battle), they are finally introducing a way to viably monetize all those eyeballs that they have acquired over the years. The answer, InVideo advertising.

InVideo

These aren’t your parents pre-rolls. Instead, YouTube is providing demographically targeted advertising 15 seconds into video streams. These advertisements are marked on the play-time indicator as a gold strip and can either be clicked on or minimized. Better yet, they do not interrupt the video that you are watching, instead only taking up the bottom 20% of the player. From the samples that I have seen, they are mostly translucent.

The “Next Big Thing”

This is a huge idea, not because YouTube has finally discovered the holy grail of advertising but because in this single move they have managed to inject advertising on almost every website that has been produced in the last four years. If you have ever embedded a funny video of a karaoke singing Panda, then welcome the YouTube affiliate program. Right now, the embedded videos don’t contain the advertisings (you’ll need to go to YouTube itself to see them) but there is absolutely no reasons that they could not change this in the future.

They could even take a LiveRail approach and compensate publishers who generate strong referrals. Google has been ruminating on how to take the concept they introduced with Adsense and use it to monetize rich media for years. This might be just the play that they have been looking for. Take the largest video serving network on the internet, introduce a highly engaging advertising system and then “flip the switch” on an affiliates network that already has a huge installed base.

Web 2.0 Roundup

Of course, this amounts to little more than idle speculation but it would be absolutely ludicrous if they did not, at least, try to leverage this advantage. YouTube has been collecting eyeballs and real estate on websites and blogs for years — it’s about time that they converted some of that reach into cash.

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