YouTube Ads (The Aftermath)

    August 27, 2007

YouTube finally unveiled the first real version of its a platform last week, and we’re still processing the results. Some stories:

Everyone’s claiming they invented YouTube’s ad style, the overlay ad. VideoEgg ran a banner on their site, saying, “We invented the video overlay ad about a year ago”. Of course, YouTube invented the embedded Flash player VideoEgg puts its videos inside of, Brightcove has been doing it for two years, and everybody takes good ideas from everybody else. After all, if it’s sucha good idea, why wouldn’t everybody use it?

Mary Meeker at Morgan Stanley got herself in an embarrassing situation, as she tried to predict YouTube’s future revenue growth and misunderstood the meaning of CPM. By mistaking CPM as “cost per impression” instead of “cost per thousand”, she overstated her analysis by a factor of a thousand, predicting $4.8 billion in revenue for YouTube next year (which, if it happens, I’d eat my hat).

Of course, since the new estimates were a mere $4.5 million, and analysts don’t make their money with tiny numbers, Mary tweaked the estimates so that even though they dropped a factor of a thousand, they were more optimistic than before in terms of percentages. As Henry Blodget explains, that’s called “backing into the numbers”, making them fit your expectations, and it’s why I don’t like analysts.

Anyone can predict anything based on making up numbers. Sure, you can do a lot of math to calculate what your guesses mean in the long term, but if you are still guessing, you aren’t bringing anything of value to the table. Unless analysts hold themselves to a higher level of proof than this, they should just sit back down and stop wasting our time.

A significantly large bunch of stupid YouTubers completely misunderstood the new system, proving once again the immaturity of the YouTube community, and their complete inabillity to RTFA. These users started threatening to boycott or just plain leave YouTube if Google started putting ads on their videos. Problem is, Google is only putting ads on videos it has a partnership with, and the complaining idiots are (a) too stupid to understand that and (b) too unimportant to have been offered partnerships.

If you really hate the ads, TubeStop supposedly never shows the ads, and it has the added bonus of turning off auto-play on YouTube videos. Vunderbar.