You’ll notice very few ad units while surfing YouTube, and none at all while watching videos contributed by ordinary folk like you or me. The reason? Google fears the legal repercussions of monetizing user generated content that may infringe on somebody else’s copyright.
But YouTube’s homepage is different since it merely displays thumbnails that may lead to infringing content. And it has capitalized on that page by selling a video ad unit in the upper right-hand corner for $175,000 per day (plus a commitment to buy $50,000 more in advertising elsewhere on YouTube or Google).
According to Silicon Alley Insider, YouTube is about to focus even more intently on leveraging its homepage for profit by selling large format ads that expand to fill the whole page. The ad unit, expected to come in the following weeks, will start at a price of about $200,000 per day with rates increasing in the Fall.
YouTube recently experimented with these expandable ads for Pineapple Express. When clicked on, a video ad for that movie expanded to fill the whole homepage instead of playing back inline. The video was also in high definition rather than YouTube’s normal, crummy quality, and it could be viewed in true fullscreen mode as well.
YouTube is still trying to figure out how to make more than a trickle of money for Google. The industry is watching to see how effectively the company can monetize in-video advertisements, but these currently are run only in a very small fraction of the site’s videos. Overall, YouTube is expected to make about $200 million for Google in 2008 (a tiny 1% of its total sales), mainly from these homepage ads and branded channels, which go for $200,000 a pop.
Image courtesy of NewTeeVee
Perhaps it’s just me, but I would be weary of displaying ads in high definition before giving your users the same quality in your core product.
Seems a bit backwards, no?
2 things:
a) I’m surprised that YouTube is not selling ads on a CPM basis. Is that the future of web-video?
b) The revenue of YouTube is considerably higher than it’s competitors. $200million may be small compared to Google’s revenue, but it’s still making money.
- Aanarav
Making money?
How much does YouTube cost to operate?
Roughly $3-4 million a month last time I checked. That was 3 months ago, so it might be more now.
If Google is relying on good ol’ front page ads, this doesn’t bode very well for the rest of the industry.
I’ve said it 100 times. Create commercial accounts and start charging a subscription for them (i.e. $20/month). Half the videos on YouTube are from people trying to get users over to their site, so make them pay for it.
There is your quasi-advertising revenue and you don’t even have to worry about doing any work. Make the heavy commercial contributors pay.
I am one of them (small-cap stocks) and would gladly pay the $20/month.
GT
People will always find a way to promote their websites free. However, youtube could make a profit off of smaller websites seeking promotion they can afford by doing something like what you mentioned. But what would stop everyone else with free accounts from doing the same thing? Or do you mean charge everyone?
Free accounts would turn into commercial accounts once they posted more than 50 videos (or some other other number) AND they included links/branding back to another site.
Otherwise, non-commercial users would continue to be free.
Regards,
George
I love my youtube too
I second that!;-D XXXXXX
theres so many stupid videos though
http://cashtutor.blogspot.com
Be careful how many times you make me click to get to the content I want. Especially when your video quality, but current industry levels, is sub par.
Another sign that advertisers are looking for background ads.
http://www.adcamo.com/
TechCrunch to Squeeze More Money Out of Homepage…and all other pages thanks to these damn snippets.
May be users might shift to smaller video sharing websites , especially users who only wants to distribute videos to their friends & subscribers.
I think the next days will have a fierce competition in the video sharing field and we might see website small website like tvosz.com to Boom for example
They should work on their search technology. The search experience on Youtube is lame: it’s super hard to sell performing ads on a machine that misleads its visitors.
If you tube costs 4 million per month to run, and makes 200 million per year – wow, then it should be satisfied and stop being greedy. Thats a lot of money for a website which just hosts videos which were created by other creative minds.
However, has anyone done much research about you tubes popularity. I think over the next couple of years, the shift will be away from youtube. It hosts the same old tiring type of videos, and news clips.
I am confused as to why they are focusing so intently on brand based advertisers and not equally as much on their more traditional models. For instance when you conduct a search on youtube why is it that I receive some random display ad in the corner? As opposed to them integrating the same targeted advertising they have on google into youtube. I understand the video market is somewhat different, but really it seems to me they are trying too hard to throw their old model out the door in a chase for the video holygrail of advertising – as opposed to developing both. Brand advertisers a bit weary about advertising next to random cat videos? Well do what you did with adsense and open it up to mom and pop advertisers to come in and take their place, even if it is only with text links at first and video ads in time.
But most people follow links or click on videos quickly. I don’t think I will go to YouTube main page only to click an ad.
more ads on youtube is a good idea. i’m surprised they haven’t done it yet.
utubee is bannedd hereeeeeee
I agree, I think youtube needs to put a smaller advertising campagne for the smaller businesses as well.
Something like in the $100-$1,000 ranges.
I don’t know about you , but I don’t think I want to spend $200,000 a day in advertising. That kind of money I can find much better use for, Like buying me another Lambo!