What’s Next for YouTube? Self-Serve Overlay Ads

YouTube might reach profitability this year, which means it’s time for parent company Google (s GOOG) to figure out ways to make it even more profitable. That might happen by making it even easier for small advertisers to build overlay ads to run over YouTube videos, according to a patent filing spotted by GoRumors.

In a patent application entitled “Video Overlay Advertisement Creator,” Google outlines the “methods and systems for creating video overlay advertisements suitable for use with digital videos.” The system basically allows advertisers to specify the attributes of an overlay ad through a browser-based user interface, which would be communicated back to the YouTube server. The server would then provide a preview of the ad in the advertiser’s browser. In other words, it lets advertisers build their own overlay ads, without having to hire an agency to do so.

An image of what Google has in mind is embedded below:

The ability for advertisers to create their own video ads could lead to an increase in the number of small and medium-sized businesses advertising on YouTube, which previously didn’t have the resources to create the ads themselves or the cash to hire someone to create the ads for them. As Google writes in the patent application, “The conventional techniques for development of such multimedia advertisements are complex, requiring resources beyond the means of many small to medium-sized organizations.”

By opening up advertising on YouTube to companies that previously weren’t capable, Google could democratize video advertising business in much the same way that it democratized search advertising through AdWords. It could also create a brand new revenue stream and possibly monetize user-generated content that big brand advertisers don’t want to be associated with.