The Chinese user-generated video site Youku.com (their name even sounds like YouTube!) closed Series C investment of US $25 million on November 19, according to Youku president Victor Koo. The company will use the $25 million to improve video service standards, expand the company’s sales and marketing efforts and increase research and development. While this announcement from Youku demonstrates that online video may be yet another market in China where Google finds some tough competition, the same questions remain for Youku as for YouTube—how can content producers make sure their videos are seen and how can all that seeing translate into profit?

In China, video-sharing sites like Youku face major barriers. Along with higher infrastructure costs associated with video storage, the Chinese government scrutinizes online video as harshly as it does TV programs. However with some strategic partnerships—such as a deal with Baidu, China’s most popular search engine—Youku has gained an early lead on other video sites since its launch last December. This already popular service claims “videos are broadcast more than 70 million times a day.”

With 77 percent of Internet users acknowledging that they have consumed online video and forty-five percent of user’s time online spent consuming content, it is no wonder Youku found firm financial backing. And China now has the fastest-growing online population worldwide. Second only to the U.S., China’s 160 million Web users represent the second-largest global market. A leading monetization model has yet to surface on either side of the Pacific however, with various ad formats vying for primacy but no single form taking the clear lead.

As we move into 2008, media companies will likely continue their ambivalent relationship with 3rd party distribution sites such as YouTube and Youku. Content producers will face similar frustrations, as they too look to spur consumption to levels meaningful enough to build sizeable revenue online. Connecting users to content—and finding the value in that connection—will be more important than ever as this market continues to grow and more and more multimedia floods the Web.

It’s that season again, when the weather cools dramatically and along with the heavier coats we suddenly need to bring out the tissue boxes and up our daily does of vitamin C to try to escape catching a cold.

But where some home made chicken soup and a trip to the family doctor were once the obvious answers once the germs finally caught up to you, the Web now plays an increasing role in people’s health management. A recent article on sfgate.com emphasizes how many health-focused websites have begun modeling themselves after YouTube and social-networking sites such as MySpace. This appears to be part of a larger effort to connect patients with each other and help them navigate the overwhelming amounts of medical information available online. From WebMD to various niche support group sites, Internet users have a wealth of medical information available to them and a growing number of people are integrating Web search and health communities into their online experience.

New Web 2.0 Elements

Larger players such as Yahoo host online patient communities, as do health-information sites like WebMD. But the Web 2.0 generation of social networking and specialized health search engines offers patients new tools. From user-generated video, to blogs and health podcasts, to wikis and social networking sites, the ways we can use the Web for health related research and support are expanding rapidly.

Social networking health sites

These sites are among a new wave of social networking services available for patients to share experiences and learn more about their health conditions:

NursesRateDoctors.com: With the motto, “Spread the word; improve the care,” this site recruits nurses to give their candid assessment of doctors so that patients can have better information and make choices to get quality care.

DailyStrength.org: Gives patients and caregivers a place to join a support community, write a journal, share videos, and send virtual support with “hugs” and “flowers.”

ReliefInSite.com: Helps patients record and track their pain and medications and share it with their doctors, nurses, pain specialists, therapists, friends and family members.

OrganizedWisdom.com: The goal of this site is “to provide the best search service in the world for health by hand-crafting search results that physicians and consumers will recommend to their family and friends.” OrganizedWisdom aligns doctor-reviewed and user-generated health content to help people make decisions regarding treatment and care.

PatientsLikeMe.com: A platform for collecting and sharing real world, outcome-based patient data. The creators are working to establish data-sharing partnerships with doctors, pharmaceutical and medical device companies, research organizations, and non-profits. This site offers people battling devastating diseases the ability to discuss and track in great detail the treatment options other patients in their disease group are trying.

ICYou.com: Defines itself as a site dedicated to making it simple for anyone to find, upload, watch and share healthcare videos worldwide. Dubbed the YouTube of health care, ICYou.com allows patients to share their stories through online video clips. The site, which is expected to formally launch late this year or early next, already has about 1,500 posted videos.

Online Video Advertising Opportunity

While using the Web for health research is hardly a new phenomenon, health-related content is becoming increasingly vast and varied as a growing number of people decide to share their own experiences online through health communities, blogs and online video. A Google search for health videos evidences this trend toward online video libraries and user—or patient—testimonials. And advertisers want to be where the video is on the Web.

How to Advertise with Integrity

There is an opportunity here, albeit one rife with challenges. Advertising from the pharmaceutical industry, medical-device manufacturer and health insurers seems a natural revenue stream for these online health communities, but anyone who has ever been subjected to the big pharmaceutical TV ads might realize the potential tension in such a partnership. To successfully take advantage of this market, medical industry advertisers need to get their messages and targeting spot on. As founders of the health-focused Web communities have noted, medical ads often cause patients to question the validity of a site’s information. Health sites and their potential advertisers have an incredible chance to build revenue as more consumers look the Web for health information and support. The question is whether sites will be able to maintain their credibility with the users—who value the conversational, Web 2.0 experience—while letting in the ads that bring health industry dollars.

There is plenty of excitement right now with people talking, blogging, estimating and projecting about the power of online video. Everyone from the kid next door with the video camera uploading content to YouTube, to Presidential candidates, to big shot marketers seems to want in on the Web video action. In a recent report Tubemogul highlighted the impact potential of video asking:

“…when was the last time that a paid search listing or banner ad raised your blood pressure or induced you to forward something to a friend?”

They definitely have a point.

Yet online video raises as many hurdles as it does cheers of elation. Marketers are in search of plausible ways to produce the myriad iterations necessary for the geographic, demographic, and use-based targeting that Web video makes ultimately inevitable and increasingly challenging. Will all the excitement and hype translate into increased budgeting for online video and other social media?

Although speculative answers abound, the most successful form and ultimate direction online video will take remains an unknown. Coremetrics’ second annual Face of the New Marketer survey illustrates that social media marketing tools—including user generated videos and product reviews—are becoming integral to online marketing. A disconnect remains however between the desirability of social marketing and the budget allocated to it; 78% of respondents see social media marketing as a way to gain competitive edge, but only 7.75% of total online marketing spend is devoted to it. John Squire, SVP product strategy, GM marketing services at Coremetrics explains:

“marketers are aware of the impact that social media marketing can have on their overall program, but view it as uncharted territory, not worthy of their budget.”

One of the biggest challenges facing marketers wanting to adopt online video is lack of tools and expertise. Video production costs are hard to stomach—it is a new medium that has some marketers questioning whether returns will justify the cost. One possible answer lies in an increased blurring of the lines between user generated content, commissioned ads and user reviews. Online Video Insider entry Video Ads For People Without TV points to consumer generated content campaigns run through managed brand communities as at least a partial solution to the problems of cost and video proficiency.

When it comes to distribution and targeting, companies must often choose between reach and quality of content. The Online Video Insider post: The Next Video Ad Innovation: Automation of Ad Assembly contends:

“The need to innovate automation tools in the video ad editing space is driven by demand for video ads from every property on the Internet, yet few have discovered how to tackle the problem of mass adoption.”

Some companies are already onto this. If companies opt to automate production of online videos to save on cost and time, will their content still effectively engage consumers? At the moment this looks to be a trade off of artistry and quality for targeting and relevance. If, however, creators accept that they must build their “video templates” around editing techniques that the technology handles well, perhaps such automation could solve for cost and scalability without losing all creativity and viewer engagement.

In their report, “Web Video Marketing - Best Practices”, Tubemogul states that the strength of online video as a marketing medium stems from its engagement potential, SEO value, and measurement opportunities. In its report Tubemogul argues that 50% of creating a great viral video—which is really the ultimate success story for online video—is about content and production. The goal, as they put it, “is to create something remarkable, literally, something that causes people to remark - and in doing so to effectively convey your message.”

In order to grow online video needs conquer issues of cost and scalability while somehow remaining remarkable. How can Web video maintain creativity, specificity and influence while scaling to impact a greater swath of people? Since hoping your videos will “go viral” is not a complete distribution strategy—particularly if companies opt for template videos—video SEO must begin to play a much larger role. As videos flood the Web, getting people to find and watch your videos will only become more challenging though increasingly significant for raising brand awareness and content monetization.