YouTube Ads

Google, who has been having a hard time trying to monetize YouTube, has recently devised a new way to do so: Let content creators sells ads.

Professional content producers are now given the ability to sell advertising on their YouTube channels. This includes various features such as the clickable video expansion buttons that appear at the bottom of the YouTube videos. The revenue is split between the content creator and YouTube, just as it would be if YouTube sold the ads.

YouTube is by far the largest video site, with more than 4 billion videos viewed in March. These are staggering numbers but YouTube has not been able to convert that audience into significant dollars. Seeing as how YouTube does have so many viewers, it was inevitable that the first priority in 2008 was to figure out how to better monetize YouTube. Bear Stearns analyst Robert Peck, pegs YouTube's revenue at about $90 million this year; other estimates have it as high as $200 million. Although this may seem to be a large amount of money, that would be just a touch more than 1% of Google's total revenue.

For many professional content creators and producers, being able to control the inventory that surrounds their videos is an important factor when they consider where and how to distribute online. Revision3, the online-video-production company behind shows such as "Diggnation" and "Techzilla," is selling advertising on YouTube, starting with GoDaddy, a sponsor that is regularly integrated into the content of its shows. Many Revision3 shows have integrated sponsors, and the company's CEO, Jim Louderback, said the ability to pair companion YouTube advertising in and around the videos is appealing.

For YouTube, such deals give the site's sales force additional representation within ad agencies and a lot of leverage and power when it comes to trying to get high quality content creators to advertise and distribute on the site. This is very intriguing because it really exemplifies new age advertisement techniques, including such new distribution options and potential money that can be made.