The Looming Scrum for $67 Billion in Advertising Dollars

This month’s Wired magazine has a cover story on YouTube that puts Google’s $1.65 billion buy more in a strategic context. The subhead of the story cuts to the chase: “TV advertising is broken, putting $67 billion up for grabs. Which explains why Google spent a billion and change on an online video startup.”

On the day they announcement came out I did a blog post here that had a similar quick hit that this purchase was more about putting the pieces in place for inventing the TV of the 21st century. Google is close to figuring out the advertising model that works in this new Internetized environment. And YouTube is onto something about how motion media might work in this space. Connect successful advertising and successful content and you might have a real formula that might work for a long run. By no means this is a done deal, but it does present some interesting possibilities.

All those developments come at a time when the traditional 30-second ad model for TV is breaking down with, among other things, the spread of digital video recorders like Tivo. In other words, the $67 billion dollars that currently is parked there will soon be looking for a new home….

Peter Leyden