For several years now, companies and analysts have been flopping around in search of a web video business model. Here’s one that will work: product placements.
Angel investor Ron Conway says product placements on the web will be a multi-billion revenue opportunity. Here’s why he’s right:
- No matter where a video goes, its product placements stay put. Digital videos can be pirated via BitTorrent, posted on video-sharing sites, or embedded anywhere on the Web — including some porn star’s MySpace page. This means content creators can use free distribution channels and still make money.
- You can’t ad-block product placements.
- Product placements never embarrass the paying advertisers because despite a video’s surroundings, the advertisers’ products stay in the same context — within the story. Even if it’s embedded on that pornstar’s profile.
- Ad agencies can use product placements to tell brand stories to specific demographics the tried-and-true way, by art and intuition. Everyone knows LonelyGirl15 viewership skews toward young and female.
- Users hate commercials and pre-rolls, with product placements paying the bills, they don’t have to watch them.
- Product placements are as measurable as a Web video’s total views, but there are also long-standing metrics.