Many “fortune-tellers” are saying that the Future of Advertising is on YouTube, and some of my PR students from this semester agree.

In fact, surveys show that Online Video is the Focus of Digital Marketing for 2009. Two reasons: Videos build brand awareness and enhance customer engagement.

Here is the third in a series of student guest posts:

THE FUTURE OF ADVERTISING ON YOUTUBE

by Osvaldo Munoz

So what lies ahead for YouTube? Can we say three-dimensional interactive ads. YouTube has unveiled a stereoscopic imaging platform that allows users to view videos in three dimensions, but the today’s technology requires us to take small steps first as Google [who bought Yahoo in 2006] keeps trying to find ways to generate more revenue from the video-sharing site.

Overlay ads, which last about 10 seconds and are semi-transparent, have started the trend for new ways to advertise without upsetting YouTube viewers. Other recent additions have been e-commerce platforms and the introduction of sponsored videos.

The e-commerce platform is based on a click-to-buy option that allows YouTubers to directly link with corresponding affiliates like iTunes and Amazon — and be able to buy or download a song or video game.

But plans are to offer more products soon. In his blog post on the subject, Glenn Brown, YouTube’s Strategic Partner Development Manager wrote:

This is just the beginning of building a broad, viable e-commerce platform for users and partners on YouTube. Our vision is to help partners across all industries — from music, to film, to print, to TV — offer useful and relevant products to a large, yet targeted audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos.

Google is not finished with its platform as it is still in test mode and only available in the United States. Glenn Brown also suggested that YouTube built its sponsored video platfom on its search and discovery system like how Google uses Adwords so that they will provide “useful, appealing content, available to advertisers of all kinds.”

But how do sponsored videos work?

In essence, you place bids on keywords. Then after a user searches using those keywords, your video will appear clearly labeled as a sponsored video. These are charged on a cost-per-click basis, meaning the advertiser pays every time a user clicks on the ad. It’s not all positive though because an advertiser still has to be able to create content that will keep the user interested enough to convert from viewer to buyer.

YouTube has just begun to break into the ad game and there seems to be a lot more in store: YouTube should continue to push the e-commerce platform, partnering up with more affiliates and expand its product range.

I can see a cell phone promo or even a runway model fashion show with a click-to-buy link for its users.

On a similar note, sponsored videos will be able to expand with the development of YouTube XL, a site created to optimize viewing on any large screen. Furthermore the extension of YouTube into gaming consoles like Playstation 3 and Wii will be able to provide advertisers with a wider reach and maybe even seek out niche markets.

Here are a few recent online opinions on YouTube advertising:

• Is YouTube the new Goldmine?
• Connect with YouTube for Brand Advertising
• Marketing Benefits of YouTube Advertising

How do you feel? Do you think that EVERYONE “can” and “ought” to advertise through video? What will happen to TV if  ad dollars leave? Will online ads make us buy . . . or buy more?
Next post: Marty Nemko’s career advice related to Social Media practice