AFI BLOG: Media and Technology

Advertising Age

Google, Looking to Monetize Video Site, Is Letting Content Producers Sell Advertising on Their Branded Channels

Google has struggled to find the best way to monetize YouTube. The latest idea: Let content creators sell ads.

Professional content producers — those who come equipped with their own ad-sales teams — are now able to sell advertising on their YouTube channels. That includes the click-to-expand overlays that run across the bottoms of YouTube videos and display units on the page that hosts the video player. 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, according to ComScore, but it has not been able to translate that audience into significant dollars. Google CEO Eric Schmidt has said better monetizing of YouTube is priority No. 1 in 2008. Bear Stearns analyst Robert Peck pegs YouTube’s revenue at about $90 million this year; other estimates have it as high as $200 million. Even at the high end, that would be just a touch more than 1% of Google’s total revenue. (YouTube’s head of monetization, Shashi Seth, recently left the company to join a Silicon Valley start-up.)

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