Developed by Ogilvy Toronto, a professional ad agency (as most ads are), the piece seems like it would fit in well on traditional media, such as TV. However, by distributing the video on YouTube, Dove made a critical change that seems to have benefitted them tremendously. The video has gotten well over a million views since its inception (and even more if you count all the copies), while at the same time costing virtually nothing to distribute. That’s quite the ROI - though a TV spot would probably get more viewers, it certainly would cost much, much more.

Furthermore, the people viewing the ads are doing so willingly. This is in sharp contrast to TV ads, which in my opinion, rely on ad nauseam tactics to drive home their point. This is really the advantage of viral marketing - it spreads from person to person (at least in its early stages), and not really from a centralized source. However, this also puts the onus on the advertiser to develop an interesting and captivating piece, as this is effectively determines how many people will see the ad, not how much money is spent on distribution. But, perhaps this is a good thing - after seeing some of the commercials they now force upon you at the theatres, I would welcome an improvement on advertising.

Another advantage of the viral marketing campaign are the inevitable spinoffs that will occur. The Dove video has already spawned copycat and parody pieces on YouTube, with people eager to either display their Photoship skills or elicite a laugh or two. In effect, this is giving Dove free publicity. While Dove isn’t the first company to use viral marketing to their advantage, this is one of the times I’ve seen a seemingly made-for-TV spot distributed only on the Internet. Except Dove’s foray into this arena to be a litmus test for other advertisers - and by most measures, the results seem to be quite positive. One could argue that all this publicity won’t necessarily result in increased sales - but that could be said of any marketing campaign.

Does this mean that the sky is falling for traditional advertising mediums? Well, yes and no. (Forgive me for taking the easy way out and avoiding a direct answer) Traditional advertising is not going anywhere anytime soon. You will still see companies throwing millions at the prospect of the 30-second SuperBowl ad, which has always been the time to put out innovative commercials. However, the Internet has its own niche, and one that is rapidly being taken over and being taken serious by more companies. I think this will eventually force marketers to re-think and hopefully innovate more when it comes to ad spots.

Some will say that this deal officially marks the beginning of “Bubble 2.0″, since YouTube is not yet profitable. I’m assuming Google has some pretty bright people working for them, so what was their reasoning behind this move? Certainly, $1.65 billion USD isn’t a lot for them, ever since their IPO, but the real concern is YouTube’s high operating costs - serving up all those videos takes up a lot of bandwidth, which in turn translates into large monthly bills.

Cornering the market

However, the major reason behind this move must have been to corner the online video-sharing market. Google Video, launched not long ago, was a direct competitor to YouTube, but it received lukewarm support from the majority, who were already entrenched in YouTube. By grabbing hold of YouTube, Google effectively has a near-monopoly in the video-sharing market. They must have some future plan for how they will profit from these sites, besides just advertising revenue and “getting their name out there”.

Furthermore, operating costs aren’t the only problem they need to think of. Copyright violations are rampant on YouTube, and companies haven’t been afraid to pursue these matters in court - Google will certainly be dealing with more potential lawsuits in the coming months and years over material used in videos shared on their sites.

Overall, I don’t know where I stand on this. On the one hand, this could prove to be a brilliant move if Google can successfully lead its YouTube branch into profitability - if it doesn’t, it will be a hallmark and a defining moment of “Bubble 2.0″.