YouTube may finally be making some headway in convincing large marketers to get over their phobia of user-generated content. A new report from Piper Jaffray analyst Gene Munster says YouTube is selling in-stream advertising on more videos and adding new major advertisers.
To make reading the results of this report more fun TMV thought they would bring in industry agent provocateur Wayne Rosso again to provide his views on what this increase in video advertising spend means for the music business.
The report surveyed the top 100 videos (by views) on YouTube during a single week in February with an eye toward how many played ads and what kind of ads ran. The report found that:
72 percent of the ads displayed were in-video ads versus 52 percent in January and 63 percent in December.
New major advertisers on the site added included Verizon (NYSE: VZ), Adidas, Xbox, Disney (NYSE: DIS), Kraft, and Chevy.
YouTube will start charging people to download some of its videos.
Good luck with that.
12 percent of the top 100 videos, including ones featuring Mercedes-Benz and Microsoft’s Halo, were branded promotional videos.
29 percent of videos had an ad versus 25 percent in January and 30 percent in December
In-video ads are higher quality (and have higher CPMs) than so-called run-of-network cost-per-click ads, so more in-video ads represent progress for the company.
Yet, YouTube sells ads on only a fraction of its videos—YouTube itself hasn’t said publicly what that percentage is, but the common speculation is about 25 percent—and so it still has a long way to go to turn itself into an ad-revenue-generating machine.