Google’s acquisition of YouTube poses implications and opportunities for those of us working on in-store and out-of-home media networks. To be clear, it is not likely to have much effect on large, homogeneous in-store media networks (like the ones found in nearly every Wal-Mart and Target store) or single-brand merchandising networks (like the kind you see in high-end clothing retailers). Things start to get more interesting, however, in less homogenized environments.

Mall concourse advertising — the longtime domain of AdSpace Networks and others — could be an ideal application. While AdSpace and relative newcomers such as the OnSpot Digital Network (a partnership between Simon Property Group and media conglomerate Publicis Groupe) have focused on some creative ways of expanding and improving the in-mall experience with digital signage, the addition of cheap, plentiful and readily-available content from a massive Google-powered network could go a long way toward improving things even more. Likewise, I’ve noticed a recent trend of putting screens at a seemingly random sampling of local venues in certain towns or regions, in the hopes of selling ads to other local or national vendors. Much like the army of Web sites that run AdSense, these smaller (or at least less consistent) networks also seem to be prime targets for YouTube-sourced content. Envision this scenario:

  • Advertisers upload video ads into a new Google Video AdSense service, and tag it with relevant information, like product name, target demographic information, etc. Other content producers upload entertainment content. Once reviewed and approved, it would go into a public Video AdSense ad pool.
  • Meanwhile, digital signage network owners configure their screen schedules to include some amount of time for pre-selected content (the venue’s ads and messages, public service announcements, etc.), and another block of time for the AdSense pool.
  • At playback time, each screen goes through its playlist as usual. Now here’s where it gets interesting: when selecting an AdSense ad to play, Google supplies a spot based on its algorithm, using the data attached to both the video files and the screens. Depending on how desirable the screen location and audience is, this could initiate a real-time auction to decide which ad gets placed on the screen, with revenues shared between Google and the screen’s owner.
  • Similarly, when selecting YouTube content that doesn’t fall into the realm of straight advertising (such as music videos), Google selects content appropriate to the venue and offers it to the network for some nominal cost per play.  The network owner could then decide on the fly (presumably with the help of some software) whether to purchase the content playback rights and show it, or opt for some less expensive or free content. If nothing appropriate or cheap enough is found, the digital signage software could simply fall back to its pre-stored or venue-specific content.

Things get even crazier when you factor in the major licensing deals that both Google and YouTube have been working on for the past several months. With Fox airing episodes on MySpace and CBS signing up with YouTube, it seems that the networks are becoming more comfortable with expanding their content distribution channels. How long before they craft a pricing model where a public venue — perhaps a diner or a hair salon — can purchase episodes of CSI or Survivor to show in the waiting area?

Unfortunately, what’s missing from this model is an appropriate measurement metric that allows for the improvement of content selection. Given the proliferation of digital signage in all kinds of public places, I can envision a significant demand for this kind of offering in the not-too-distant future — especially for the smaller networks. Before that happens, however, there are a number of business, legal and technical issues that need to be worked out.

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