For those of you who haven’t already heard, Google in late June acquired mDialog – a video advertising firm that specializes in helping large media companies measure and deliver video content to a wide range of connected devices. The implications of this purchase seem to be quite clear. Google’s looking beyond the PC to other platforms; it’s hoping to expand its large marketing arm to smartphones, tablets, and video game consoles.
That isn’t all Google’s looking to do – there’s a bit more to this purchase.
For one, it signifies that Google is well aware of the current issue with YouTube video ads. I’m not going to mince words here – they’re kind of stuck in a rut. YouTube advertising is broken, and the mDialog acquisition is one more step by Google in the long process that’ll be required to fix it.
One problem is that most users don’t actually bother to watch the pre-roll ads. Even when they’re properly targeted, they tend to be intrusive and irritating, serving as a wall between user and content. That the majority of YouTube ads are simply adapted television spots hardly helps matters – it’s incredibly rare to see a video advertisement specifically crafted for the platform.
On top of that – even though there’s a YouTube app on virtually every mobile OS on the market – there are no mobile YouTube ads. The videos you see on your phone are virtually identical to those you’d see on your computer, only shrunk down to a smaller resolution. Again, this is far from ideal, particularly given the immense popularity of mobile technology.
Of course, both of the above factors may well be related to the fact that YouTube advertising is itself more about the user than the medium. It sort of has to be, given that YouTube’s nature has driven the CPM of video advertising down into the dirt. Ad revenue on YouTube is nowhere near as high as it should be, and many YouTube partners aren’t receiving enough money to support anything resembling ‘premium’ programming. Something in YouTube’s system of advertising simply doesn’t seem to be working.
Perhaps as a direct result, spending on YouTube advertising has lagged behind other forms of online marketing. Google is no doubt aware of this, and hopes to tap into mDialog’s technology to make video ads a more attractive prospect for marketers, making ads available on a wider selection of devices. In so doing, it’ll also be able to more effectively tailor ads by device – someone watching YouTube on their Xbox One might be likelier to see an ad for Titanfall than someone connected on an iPhone.
With its mDialog acquisition, Google’s looking to take YouTube marketing beyond the PC. But the acquisition means a great deal more than that, as well. YouTube’s an incredibly powerful platform with one of the largest audiences on the Internet, yet its advertising model is completely imperfect. There can be no doubt that Google is well aware of this problem – and that it’s doing everything in its power to address it.
