• by Bill Wise , October 20, 2011

With Google’s Q3 just behind us and a Hulu IPO on the horizon, it seems worthwhile to ask which one of these two companies will own the future of prime video inventory. That’s still an open question; and of course, any number of third players could come and take the reins. But what’s important to understand is that Hulu and YouTube represent not just an epic battle of networks, but a fundamental conundrum in digital media buying. And that conundrum is about metrics.

But before we get to the future, let’s start with a look at the present -- which Google / YouTube seems to own. YouTube, the world’s most popular video site, rakes in an estimated $1 billion of the entire $2.2 billion digital video ad market, double Hulu’s internal prediction of $500 million for 2011. YouTube and Google’s dominance in viewership is unparalleled, too, with comScore ranking “Google sites” at six times more viewership than that of Hulu, and the highest video viewership levels on the Web. And it’s not just a site for one-off video clips of dancing cats, either; just ask Lucas Cruikshank, whose YouTube channel has been viewed nearly 120 million times, and has spun off into a feature-length film produced by Nickelodeon.

Of course, one quick look at Lucas Cruikshank’s creation, the unbearably grating Fred Figglehorn, or at similarly popular YouTube presences like Annoying Orange, and you’ll instantly be reminded that YouTube still hasn’t reached the brand strength of Hulu. Hulu is still the place for prime content like “30 Rock” and “Desperate Housewives”; YouTube is the place for varying stages along the long tail of video content. That could change, of course, and YouTube could become the next HBO. But that’s hard to imagine, especially as that kind of transformation would probably require YouTube to eschew its long-tail stuff, which is also its cash cow.

What does all of this have to do with metrics? A lot. Because while YouTube doesn’t offer the best content, it is tied into the world’s biggest ad network of Google/DoubleClick. And when you layer topnotch targeting and optimization data on top of middlebrow and lowbrow content, that so-so inventory starts to become a lot more attractive. 

I’ll put this a little more strongly. Hulu is hyper-focused on offering the best environment on one site: Hulu.com. It hand-picks its programming, and even allows viewers to heavily control their ad experience. The result is a brand advertiser’s dream environment for creating a good image through an online video buy. Google is focused on building an empire out of trillions of data points -- an effort that’s basically the opposite of building a single, perfect site. Yes, I’m oversimplifying -- Hulu is no slouch at helping advertisers work through data, Google’s Chinese Walls between its properties are a lot stronger than you might think, and top brands are certainly happily flocking to YouTube. But the fact remains that these two companies have very different focuses, and it will be hard for either of those businesses to really lead in the other’s bailiwick.

All of this leaves media buyers with an either/or proposition. They either go with the site that provides the best brand environment, or they go with the site that stands to best help them leverage metrics toward a better media buy (at the mercy of the network’s own data, of course).

There should be a way for media planners and third parties to gather their own data across sites and channels, effectively creating their own “data networks” out of every destination they see as the best fit for advertiser dollars -- be that YouTube, Hulu, or anywhere else. Unfortunately, that just isn’t the case today. Dven the most powerful DSPs are limited to just a few channels, and Microsoft Excel remains a leading cross-touchpoint media planning tool. In other words, media channels aren’t interoperable on the data level, and media planners don’t have the tools they need to make all their data sync. If we want to give advertisers the freedom of planning for brand environment and data, our media data needs to do more.