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Nov 13, 2008

YouTube to Sell Advertising on Pages of Search Results

Published: November 12, 2008

Google announced on Wednesday that it would begin selling space onYouTube search-results pages to advertisers, part of its effort to turn its expensive acquisition into a major revenue producer.

The feature allows anyone who has a video on YouTube to promote it on a search-results page. An advertiser — or a video maker who wants to promote a work — can bid on keywords like “silly cats,” “financial crisis,” “James Bond,” or anything that strikes one’s fancy.

The promoted videos are featured on the right-hand side of the YouTube search-results page with a small image and some text.

Advertisers are charged when a viewer clicks on the ad, and can set a maximum price per click that they want to pay. Google determines which ads will be shown based on what price the advertisers bid, along with factors like relevance to the keyword, which is similar to the way it selects ads shown on Google’s regular search results.

A search product for YouTube makes sense — it had the third-highest number of search queries of any Web property in September, after Google and Yahoo, according tocomScore, the online measurement firm.

Advertisers said that they had been waiting for a way to promote their clients’ videos on the site.

“I’ve always liked YouTube, but as an advertising mode, it’s difficult,” said Ashley Vinson, executive producer of integrated creative at the advertising agency DDB Chicago, adding that “I can get my videos to show up when people are doing searches, versus me sending my videos to 20 friends and hoping someone finds it.”

This is one of several efforts that Google has made to increase revenue at YouTube, for which Google paid $1.65 billion two years ago. It has started showing ads within videos and running contests sponsored by marketers. Last month, it added “click to buy” icons to ads that took viewers from YouTube videos to iTunes or Amazon.com.

Google executives have said that the company has not quite perfected its model for the site.

“I personally do not believe that the perfect ad product for YouTube has been invented yet,” Eric E. Schmidt, Google’s chief executive, said in a conference call with analysts in July.

Some advertisers remain nervous about the site, as even Google executives acknowledge.

“There’s the assumption that on YouTube, it’s 17-year-old boys watching dogs’ skateboarding videos,” said Tracy Chan, a Google product manager, at the press conference introducing the feature...

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