UPDATE: I have removed the uTag script that automatically changed my URLs. And for brevity, the technical issues with uTag that I address in this post are:

1. If the ad banner is left open after visiting a site, the user continues surfing to other websites, and later closes the ad banner, the browser will automatically refresh to the page first visited by following the uTag link.
2. In the same vein, once the ad banner is closed, using the Back button will simply reload the banner frame, rather than going back to the linking site.
3. A uTag Death Loop exists, whereby a uTag link to another uTag enabled site will result in an increasing number of ad banners stacked on top of each other. Read below for how this happens.

Put simply, uTag is a monetisation strategy for linking. Several sites already provide link shortening services which have become popular chiefly amongst Twitter users, who need a short link because their posts have a 140 character limit. Examples are bit.ly, is.gd, tinyurl.com, to name just a few. The difference with uT.ag is that it aims to pay people for providing those outbound links.

The utag link will provide an ad banner on the target page and, at the end of a payment period, a share of revenue is deposited into a pre-nominated paypal account. The ad banner sits below the normal page content and can be closed if a user considers it too intrusive, but will the banner become more of an annoyance for people than the revenue is worth? Also, if users hate the banner so much they stop trusting or using your links, then you have a serious problem.

So it’s great in theory – a revolution of the link economy. Whereas people linking out to quality content were in the past building a reputation as a trusted resource, the idea is that now you can still do that, but at the same time actually be paid! But there are still some bugs to be worked out that may turn people off, and away from your content.

The uTag blog has listed a few external reviews of their service, while
Pantsland’s Brad Kellet has aggregated a few responses from his Twitter crowd after he asked for their thoughts on the banner ads.

I’ve implemented the code on my site and, as you’ll see, it rewires every outbound link to a uTag link (UPDATE: no longer). I see three main issues with the service. As Hugo Sharp, one of the uTag developers, responded to these bug questions on Twitter (@hugosharp), I present the exchange here.

The uTag death loop I referred to is a possible scenario in which a uTag link to another uTag enabled site will result in an increasing number of ad banners stacked up on each other.

Read the following Tweets in reverse order to see how this outcome, a double ad banner, happened.

So a brief experiment confirmed the existence of a uTag Death Loop, or as @hugosharp described it, a potential black hole.

As my last (top) update mentioned, the experiment was unsuccessful in that I couldn’t loop back to my site from Twitter, because Twitter outbound links open in a new tab or window. However if I linked to a uTag enabled site, which in turn linked back to my uTag enabled site, a loop of following those two links could theoretically result in a never ending stack of uTag ad banners.

If a high traffic site was using uTag links they might expect to lose a proportion of visitors who get sick of the intrusiveness, and apparent unpredictability, of the ads. As I mentioned at the beginning, some visitors may stop trusting your links, or using them at all, because of the banner they know they’ll get.

While you shouldn’t disregard the unhappiness of a proportion of visitors, some people may offset that with the possibility of revenue that the uTag link provides.

Mine is not a high traffic site, so with little to no return on the uTag banner ad revenue the uTag links may have to go.

The example suggesting there was little money in online video mentioned Perez Hilton from TMZ, who claims to have only made $5,000 from 25 million video views on YouTube. Safran says Perez could realistically be making $500,000 a month.

Of course Perez isn’t making money off video. He’s hosting it on YouTube. That’s a free service. He doesn’t have control over pre-roll tied with banner ads or any of the tracking that’s required to make advertisers want your product. He’s paying nothing for video hosting, so naturally he’s getting next to nothing in return.

Even at a modest $20 CPM (and this should be $30 – $40), he could be bringing in $500,000 a month in preroll ads. He’s missing out on $6 million in inventory.

Safran is adamant that just because you can’t make much money off YouTube doesn’t mean there is no money to be had in online video.

via Lost Remote TV Blog

So what is it about owning your brand that brings in the advertisers? Safran points out that Perez may not be making as much money as he could because of ownership rights to those videos. When online newspapers do video, the ‘wire’ videos from Reuters and Sky News (in Australia) are generic news items. Often they’re not local, or locally owned.

If you don’t get a lot of views, perhaps its because people are aware they could get that news and video at any other site, since you’ll often see the same ‘wire’ video across competing sites, as you would agency stories across print.

So what will a viewing public repeatedly come back looking for? Trusted local content delivery. By trusted, I mean people are aware that the video they want to see can be found with your media organisation so they will eventually, unprompted, return repeatedly to see what’s new.

In the case of TMZ, this is guaranteed celebrity video, pictures and humiliation that will be regularly updated, and that either can’t be seen anywhere else, or is just easier to find on TMZ because you know it will be there. You can ‘trust’ there will be something there to see.

In the case of local news sites, the only video of interest to your loyal readers or viewers that you can guarantee to always have is – local video. And if you do it well, they keep coming back, just to see if you’ve got the video they trust you’ll have. As local content, you absolutely won’t get the 25 million video views that celebrity clips will get on YouTube, but if you’re getting a large chunk of the local population, that translates into excellent advertising dollars locally.

So I remain a believer in the potential of locally produced online news video, and the market for it. Corey Bergman makes a good point in the post in question, consumers are going to begin demanding more accessible content.

Just vaguely thinking about doing online and mobile content delivery won’t cut it. Our news sites need to be aggressive in developing their own multi-platform content-delivery solutions so that, again, by making themselves the reliable point of content consumption they capture the new market, rather than try to catch up with it.