Google Slowly Turning YouTube Into A Moneymaker
Apr 9, 2009 at 1:34pm ET by Matt McGee
There are signs this week that Google is slowly turning YouTube into a legitimate source of revenue, but there are also questions whether that’s happening quickly enough and if the revenue will ever become a profit.
Let’s start with an AdAge article that reports YouTube is selling ads on about 9% of its video views — up from 6% a year ago. A slow increase for sure, but with comScore estimating YouTube showed 5.3 billion videos in February, it means YouTube is selling ads on almost 500 million video views. According to AdAge, that’s more videos than its nearest competitor has total views.
Meanwhile, Google has announced that YouTube’s Click-to-Buy advertising/e-commerce platform is being expanded to eight more countries: Australia, Canada, France, Ireland, Italy, Japan, New Zealand, and Sweden. Click-to-Buy is a system that places ads (links) below the video so viewers can purchase the song, CD, DVD, and video games related to the videos they’re watching. Google says three of the four biggest music labels are part of the program, and are “selling millions of songs” through these links.
But is all of this enough?
The AdAge article points out that Google itself has admitted it’s not making “significant revenue” from YouTube, and current estimates for its ad revenue range from $120 million to $500 million. Silicon Alley Insider looks at these numbers under the sensational headline, “YouTube Is Doomed.” Says Benjamin Wayne:
“YouTube is adamant that ultimately they’ll find an advertising solution that will enable the ungainly behemoth to reach profitability. Looking at the math, it doesn’t seem likely.”
What do you think? Is YouTube doomed? Can Google turn it into a moneymaker without turning away its loyal userbase?
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Google is monetizing YouTube… At the cost of PPC Campaigns:
Search Network ads are now being presented in the YouTube Search results pages. Everyone knows that Youtube users don’t like outclicking (which is why they have problems monetizing) because of the nature of the site – you are there to watch a funny video or a music clip, not to buy a product… commercial intent on YouTube is therefore substantially lower than on ANY search engine.
Furthermore, the click rate is terrible, and that affects every paid search marketer’s campaign as it comes under the Search network, and therefore affects everyone’s Quality Score… Immagine this loss in CTR (and therfore QS) amounts to even the slightest, +0.1$ per month per adwords account. I don’t have the number of adwords accoutn available, but that would amount to a huge sum of money.
If AdWords gave the possibility to exclude certain ’search’ partners then it would be fine, but at the moment google does not offer this ability fo fear that people will exclude search partners