Online video
YouTube may be the biggest success story of the Web 2.0 generation. The site was founded in February 2005, and in less than one year, clones were everywhere. At the time, the business plans for video websites were unclear, yet venture capitalists continued to support me-too video sites. Sites like Vimeo, Veoh and Blip.tv continued to receive funding despite the small percentage of overall videos they were serving. One has to wonder when the shakeout will begin to happen in this very crowded market. 

YouTube still serves up a majority of the videos online -- 5 billion monthly -- but Hulu has become a top-10 video site. In August, by comScore's measure, it served more than 122 million TV shows. Hulu has been able to build a brand from nothing and create a significant consumer business just by putting TV on the web. Advertising on Hulu is based on CPMs and is a good target for advertisers because of the viral nature of the TV clips. 

While the future of the advertising on user-generated video sites is in question, focusing ad dollars on network-supported sites like Hulu and Google (which has added channels that carry MGM content or CBS content) seems to be a smart choice for advertisers. Additionally, companies like Google have the R&D dollars and the engineering resources to determine the best ways to serve ads within user-generated content. And once they crack that nut, the me-too companies will face an even tougher task of attracting advertising dollars.

Music sites
Music sites are a dime a dozen these days. The space continues to become more crowded, and advertisers are overwhelmed with so many choices. You have sites that allow you to make mix tapes such as Meemix or Mixwit. There are music search sites such as Dizzler or Jiwa, and there are streaming music/internet radio sites like Pandora and Last.fm.

The winners in this section will be the streaming music/internet radio sites. Companies like Pandora have turned the skins of their players into one big ad, and that player is open all day on your computer. Unlike traditional radio, which can only deliver audio ads, companies like Pandora have been able to take a radio experience and deliver a visual ad.

One of the up-and-comers in this crowded field is iLike. Early on, it took advantage of the growth of Facebook, and its Facebook application raised its profile in the industry. The company is using its momentum to build out a radio station that is currently in beta. Just like Last.fm and Pandora, it will be an application you can keep open on your desktop all day.

Conclusions
So what did we learn from history? In tough economic times, being smarter with your shrinking ad budgets to get the biggest bang for your buck is key to your success and survival. If you split your ad dollars among three sites, the two leaders and the up-and-comer, you have a good chance of building a successful campaign and keeping your company and/or clients on the forefront of innovation in the same breath. However, if you try spreading your campaign too thin as your own ad budgets go on a diet, you may not get the results you need. Watch sites like comScore and Compete.com to see where users start pledging their loyalty and figure out which of those sites are willing to work closely with you to target their users with highly relevant and targeted offerings. 

Sean Black is vice president of sales at Trulia.com. 

<< Previous page