MEDIA BUYING DIRECT RESPONSE TELEVISION (DRTV) ARTICLE ..

 

What You Should Know About YouTube

By: Peter Koeppel
Published: 11/06 - ERA

 

YouTube is the most popular video-sharing website. It only began last December and it now features over 100 million short video clips and 65,000 new videos are added daily. The site includes a combination of home videos and clips from TV shows and movies. It draws 34 million unique visitors a month and it's one of the top 15 most visited sites in the world (Forbes 10/16/06). It's also estimated the site has 50 million users worldwide. You Tube had 46% of visits to U.S. online-video sites in September, according to Hitwise, followed by MySpace at 21% share and Google Video with 11% (WSJ 10/7/06).
 
Early on, advertisers wanted to insert 15 second, unskippable ads that would precede the videos on YouTube. However, the site avoided taking ads until recently, in order to build a loyal following. They recently ran a funny, two-minute American Express ad on the site and 300,000 people watched it. The site started a "Participatory Video Ad" on the homepage in August and it's been sold out ever since and it brings in about $175,000 and 400,000 viewers a day. Chad Hurley, one of the founders of YouTube, "believes YouTube could help redefine the $74 billion TV ad industry, combining the clout of Google's relevant text links with the sensory power of television." (Forbes).
 
As this article was being submitted for publication, it was just announced that Google had purchased YouTube for $1.65 billion. This acquisition combines Google's huge online ad system with the biggest on-line video site and YouTube's highly engaged audience. Google will now have to deal with YouTube's copyright infringement issues, since some video and music content is now available on YouTube without the permission of the content owners. The technological and legal expertise of Google should be a great resource for helping YouTube to figure out a way to address these copyright issues.
 
Video now makes up 60% of Internet traffic and is growing rapidly, because the cost of streaming video on the net has dropped rapidly over the last few years and costs are projected to decline even further over the next several years. The demand for online video advertising is out-stripping supply and compelling video has the ability to capture and engage an audience. A fake "lonelygirl15" video diary that ran on YouTube attracted 900,000 viewers! (Forbes)
 
It's amazing that a company that started less than a year ago and has 67 employees and an office above a pizza restaurant could sell for over $1.6 billion. There are people like Mark Cuban who feel that anyone who buys YouTube is crazy, because it's a business built on piracy. (N.Y. Times 10/7/06). But Google, Yahoo and other savvy marketers understand the power and profit potential of targeted online video advertising. Direct marketers that want to stay ahead of the curve need to be testing and utilizing online video marketing. It's the wave of the future.
 
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