A 2013 analysis by eMarketer suggested that YouTube would earn $5.6 billion in gross revenues last year. After paying back advertising partners and content creators, it was still expected to rake in $1.96 billion in ad revenues worldwide, the report added, up 65.5 per cent from 2012.
That is 1.7 percent of all global digital ad revenues -- more than the marketshare of Twitter, Pandora, AOL, Amazon and LinkedIn.
Google does not disclose revenues for YouTube separately. So this is at best an estimate, but it gives an idea of the money being showered on the video website.
In India too, brand spending on YouTube has shot up over the last couple of years. Nearly 55 per cent of all video advertising in India happens on YouTube, says an executive at a digital advertising agency. This trend is unlikely to change in the near future, he adds.
Cisco expects video content to hog 69 per cent of global consumer internet traffic by 2017. India has also seen its online video consumption skyrocket to 3.71 billion videos per month, according to comScore.
“A major chunk of the audience that consumes YouTube content are people in the age group of 16-35 years, which also happens to be our target audience. Millennials are starting to choose streamed content over traditional television. While video is more expensive than other forms of content, it's growing in importance for attracting a social media-based audience, and is also a good branding exercise,” says Praveen Sinha, Founder and Managing Director, Jabong.com.
For YouTube advertisers, apart from banner and search ads, the most popular are the TrueView ads – the video ads you see before your video plays. These are meant to replace the unskippable ads on YouTube. (YouTube claims that 75 per cent of its ads are now skippable).
In longer videos, advertisers can have multiple TrueView ads. Overlay ads – transparent ads that appear at the bottom of the screen – are another option.
For advertisers willing to spend big – up to Rs 2 crore per day, according to some estimates – there are masthead ads for the homepage, called Homepage Roadblocks. These can be rich-media ads.
There was also something called First Watch, which promised to make an ad the first thing users saw on the site.
“When launching a new product, we found the First Watch to be quite effective in showcasing the communication to all unique visitors of Youtube on a particular day. Unfortunately, YouTube has discontinued selling the First Watch property,” says Kavin Mittal, Head (Product and Strategy), Hike.
But with TrueView – where users can skip ads – just how effective are the pre-roll ads? A 2013 article in The Next Web quoted Google as saying that about 70 per cent of viewers skip the pre-roll ads.
Google lets advertisers pay only if the ad is watched for at least 30 seconds.
“If you’re able to grab the attention of a viewer in the first five seconds, it’s definitely viable. If your ad is not catchy enough, even a forced watch wouldn’t come to your rescue,” says Mittal, whose company is currently running the ‘Hike up your life’ campaign with a 30-second skippable TrueView ad.
Interestingly, Mittal says that their TV ad is 10 seconds shorter.
Sinha agrees that the TrueView pre-roll ads are a great pull, and suggests 20-30-second ads work better on YouTube.
“One of the key points to keep the video interesting and keep the viewer hooked on to it,” he says.