Seth Godin wrote an interesting post today that sparked some debate within a networking group that I belong to.

Since I honor the “what is said on the list stays on the list,” I can’t bring you the whole discussion. Suffice it to say the debate was about whether or not what Seth was encouraging was click fraud or not. Just for fun on a Friday afternoon, I decided to take the contrary point of view, and I’m going to share it with you here. Its worth some consideration.

I’ll bite on the controversial point of view.

I’m a bit amazed that he didn’t get into more specifics, since CPM based advertising provides the content producers with some revenue whether the user clicks or not. Maybe the “tip jar” analogy doesn’t work for everyone, but people should thank the advertisers for bringing us all this great, free content. All we’re really asking for is the user to give our clients a little consideration when they are making their next purchasing decisions.

As a staunch defender of pre-roll, I often find myself explaining a contrary point of view. As (I hope) most of you saw, there were three independent pieces that came out in support of pre-roll this week. Tremor (self interest disclosed right here), Break/Panache, and Nate Elliott’s report for Jupiter. We all understand that there is a value exchange that has to take place in order for our business to survive. Sure we want to squeeze every last bit of performance out of our advertising and marketing efforts, but at the end of the day, someone or something has to pay to produce that content. We work in an ad-supported industry. So don’t the ads actually have to support the industry somehow?

When I see a pre-roll (reasonably targeted, appropriate length for the content, but not the point of this discussion) that “presents” or “sponsors” or otherwise enables me to get the content that I want for free, I say “Thank you” in my head, because the alternative is paying for it. Do most of us buy the NY Times at the newstand or read it for free online? Thought so.

Seth didn’t get into enough detail to make a strong case for “saying thanks” vs click fraud, and thats a shame. While display and text ads are much easier to avoid, tune out, or not engage with than video ads are, without clicking, we’d all need to go back to a straight CPM based pricing model to ensure that revenue moves into the hands of content producers. If content providers and producers dont get paid, then what we have is a hobby and not a business.

Performance based pricing models put the pressure on all of us to make our advertising really work, and that is certainly a good thing. But doing whatever it takes to ensure that people can continue to bring us the content that we want for the price we want to pay (read: nothing), then the tip-jar-click shouldn’t really be considered fraud. Advertisers don’t have to pay, and content producers don’t get paid, when we see an ad and it registers and reminds us to buy something in the store over the weekend. Maybe Dynamic Logic can introduce a “pay per brand consideration” pricing model. Again, I’m just taking the other POV for fun this afternoon. Don’t hate me because I pre-roll.

Just to keep the conversation lively, is the idea so different than Radiohead’s “pay whatever you want” to download their last album? The people that liked what they got said thanks by paying for it. Comscore reported that 38% of the people who downloaded the album paid for it at an average of about $8.

I’m well aware that we’re talking aout paying directly for the content vs. forcing an advertiser to pony up for someone elses product, but is it really “click fraud” or just the natural course of events of the business model we operate in? Maybe Seth - or all of us, for that matter - should just slap a PayPal button on every article and allow the money to flow straight to the publishers. Whatever happened to that micropayment concept anyway?

So. Let’s recap 2008’s Olympics coverage. NBC got Microsoft to front a good portion of the development costs for a video platform that didn’t meet expectations, and they forced those who wanted to watch in high quality on-demand to view on Television or on Vista.

That’s good for NBC, their TV ratings have been stellar. While a lot of people watched online, most chose to watch on the main screen most of the time because the digital experience left a lot to be desired.

And it’s great for Microsoft which got its Silverlight adoption event, had no major issues with the Silverlight 2.0 release and received exclusivity over high quality downloadable VOD delivered by TVTonic to Vista machines only.

While some (or many) will whine about the fact that they could have done better, TV has penetration in 98.2% of U.S. homes, it’s still about making money and the Olympics is about selling ads. NBC Universal is part of a publicly traded company and unlike the BBC they’re in business for their shareholders.

We may be less than impressed with what was offered versus what might have been, but when it comes down to it NBC offered more HD television and online video coverage of a live event than anyone ever. They maximized their audience and their profit by using both mediums to their advantage, and if they can do that, why would they do anything else?

So, what’s been keeping me from posting lately? Well, its simple really. I’ve been both busy - and more importantly - too close, professionally, to objectively rant away at what’s been going on in the online video advertising space over the past few weeks. Partnerships, comScore rankings, proprietary data, case studies, other bloggers….the list goes on and on. I’m jealous of the full time bloggers that don’t have to toe any party / industry / client lines.

What’s that got to do with online video? At least Comedy Central makes “The Death of Chef” availble to post here straight from their site.

When I clicked to “watch now” link to, well, watch now, I was greeted with this lovely message.

The Olympic online video version of “This game is blacked out in your area.”

Have you been to the movies lately? Jeeeeeeeeez. Ridiculous.

As I was sitting there for the 20 minutes of commercials and previews before the movie started, I found myself getting worked up a bit. Why? Because of all of the bitching and moaning that I was hearing from the people around me. By the time the 8th commercial played - all before the previews - there was a healthy (or not so healthy) mix of people laughing and people who were really, really pissed off.

As I mentioned ahead of the weekend, I was going to see The Dark Night. Over hyped. Too long. Overall, though, not too bad.

But as I was sitting there, watching ad after ad play, I starting thinking about online advertising, targeting, free content, and the great value exchange that we’re offered online.

The ads kicked off with a Fandango ad, which makes sense. Buy your tickets online. I’m OK with that one. Then came the Wal-Mart ad featuring their Hannah Montana line of clothes. Now, my niece loves her Hannah Montana t-shirts, but you wont find her watching the darkest Batman movie yet. (Yes, I know their parents are.) Then came a really long Jeep SUV ad (I think it was for Jeep, but I started texting, so I’m not 100% sure). I’m in NYC. I take the subway. Nice targeting. Then the ad for Bertoli pasta sauce. Oy.

Then came a long Coke drive thru ad, which makes sense because I could actually buy a Coke at the concession stand. Then a long Vitamin Water ad, and then finally an ad for AT&T with Martin Scorsese, which again, was appropriate for the movies.

But eight ads? Way too many. WAAAAAY too many. Why is this even acceptable? Why do I need to defend an ad online ad model that offers free content and candy that costs $1.50 and not $4.50?

My point? If you are going to shell out $11 per movie ticket, should you have to sit through 10 minutes of advertising? I was suddenly reminded - very directly - about just how sweet a deal we’ve got right now with online video.

How many ads are in front of my streamed movies from Netflix? One. For Netflix. And its really a placeholder while the content buffers. How many ads during an online hour of Lost? Three. How many on TV? At least 4 ads per break.

I’m not rushing back to the movie theater any time soon, thats for sure. I’m off the movie release schedule and on the DVD release schedule, and not looking back.

No real reason to post this other than The Star Ledger, New Jersey’s main newspaper, posted it with their review of Bruce Springsteen’s show on Monday night.

OVW is headed to Giant Stadium tonight with our cohorts from MediaPost to catch The Boss in action.

Actually, this does support Gannett’s investment in Mogulus, and shows how online video is changing the newspaper, and overall publishing, industries. No matter how good a writer you are, no music review compares to hearing the music for yourself.

Combe Incorporated’s VP of Interactive Communications Tom Cunniff recently launched a blog about consumer packaged goods marketing. Get inside his head at iCPG, “Consumer Packaged Goods, Outside the Box.” Catchy title, too.

Tom’s post, “Modern Marketing, An Allegory” explains why the video below contains everything you need to know about online marketing.

Ok, so maybe there’s a little more you should know, but it is definitely a good start!

The declining value of social network ads, particularly on Facebook are in strong opposition to the level of engagement these sites generate. Facebook users spent 527 minutes on the site in the second quarter of this year, MySpace users spent 677 minutes.

The launch of targeted ads by way of Beacon was a failure, but if Facebook opened up a reasonably priced subscription service tomorrow, I would pay for it and so would many other uses.

One of the distinctions that needs to be made regarding personal information sharing, really a better term for the vast majority of what is today termed UGC is that the information being shared is only valuable to a small number of family and friends. In this sense, it’s not content in the sense of mass media and shouldn’t be described or distributed as such.

This is what I mean when I say UGC is dead. There is no market for it except to a user’s personal network and because it’s personal, a user is more likely to pay for a subscription in exchange for a secure, private environment in which to share their personal information with friends.

Unless the person is uniquely desirable for advertisers to reach (think someone really rich like Bill Gates) you’re not going to be able to get a high CPM for that small network without excessively intrusive targeting.

If it’s Bill Gates you may get a million dollar CPM because there are a substantial number of luxury brands that would like to reach him, but the few in his demographic would far rather pay to protect their privacy.

And he’s not alone. A substantial number of existing social network site users already prefer to pay a nominal fee for premium services, preferred privacy settings and the assurance that their private information will not be shared with advertisers.

While social networks are still in a period of heavy competition and can’t avoid alienating users by charging everyone right away, they could certainly begin charging those who place a value on the privacy of the information they share and premium features that are offered.

Well, I’m calling it - user-generated content is officially dead. Hulu is here, ABC is raking in the views with their player, the studios are still adapting but beginning to develop business models, and semi-professional content creators now have the tools to compete with mainstream content.

The line is clear, people want to watch professional content, it holds value. Anything else has no value, economically at least.

So there. Now that professional content has reasserted its supreme value over everything else we can sit back and watch as the rest is weeded off of video sharing sites in an effort to cut down on costs.

Brightcove and VideoEgg already ditched their UGC businesses, Revver was done in by paying for it, and the studios are picking their fights with the rest of them - most of the remaining players can’t survive on their own - there is a major shakeout coming.

The market for UGC will be controlled by companies that build communities for people and charge them for service - YouTube can’t subsidize everyone’s cats on pianos forever, well maybe they could but they won’t, or they’ll sell better quality and relegate the rest to a landfill of grainy 300k - the next generation’s black and white.

That said, there is a lot more that can be considered professional these days. The content universe is larger than ever before, and while UGC is worthless there’s plenty of time for those with passion to become successful professional producers. It doesn’t cost all that much to create professional content these days. All that’s needed is creativity, talent, and the persistence required to build an audience from the ground up.