YouTube has announced that they plan on using a Google-like ad model where sponsored videos will appear as part of search results. Some quick reactions:

• I’m surprised they didn’t do this before. This is pretty much a replication of the Google model and, given that Google does own them this is pretty much a layup.
• I’ll be interested to see who ends up buying really popular searches on YouTube. For example will Toyota be buying “cute kitty” just for reach purposes?

The big question for me is, what are the value-added services YouTube is thinking of here? They already have sponsored pages of sorts, and these ads should go a pretty significant distance in driving traffic to those pages. Also, they know quite a bit about their consumers; will they be able to target these ads on layers outside of search? For example, will I see a different ad for a movie trailer than my wife? Perhaps my trailer will have a lot of explosions and ninjas and hers will have a couple dreamily looking into each other’s eyes? This would sort of be a type of multi-dimensional targeting.  This type of targeting would have planning applications as well, much like Google AdPlanner.

Also, are we going to see “YouTube” studios - an online facility that will allow advertisers to make templated videos that will feel like a YouTube video, rather than the 30 second spot they just ran on TV? Finally, are we going to see a full integration of YouTube into Google video? This seems like the first logical step.

Lots of questions. Not many answers. I’m looking forward to seeing how this develops.

The growth of the Internet has not only increased the power of consumers, but it also allows users to access an unlimited amount of data and content at their leisure and according to their desire. Everyone knows that YouTube has been the king when it comes to video content, but as traditional programming continues to gravitate online, hulu is quickly establishing itself as the leader in that on-demand arena.

Many refer to hulu as a “video” site, but I believe it is more accurately represented as a “content” site. A recent VideoCensus report by Nielsen Online shows that hulu now ranks No. 6 among the top sites streaming videos during the month of September, with more than 142 million streams.

Also according to Nielsen Online, hulu’s unique audience has increased 361% from 909,000 in February to 4,195,000 in September. Hulu isn’t just attracting a larger audience, its users are also spending more time viewing on-demand content as well, increasing from just under 6.5 minutes during February to a little over 19 minutes per user during September.

It will be interesting to see how the growth of these on-demand content sites, and the convergence of TV with the Internet will affect the number of eyeballs that visit dominant players such as YouTube. Moreover, how will their growth and innovation be affected if bandwidth caps ultimately do cause viewers to restrict their online consumption? Consumers value the convenience of on-demand content and will eventually want one site that provides not only the ability to upload and view videos, but the ability to access a large selection of traditional programming content as well. The relatively quick growth of hulu is evidence of consumer interest in viewing on-demand content and their willingness to view it from their computers.