Advertising on YouTube
homepage ad example

  • Overview
  • Reasons to use
  • Limitations
  • Costs
  • Reach & Frequency
  • Scheduling
  • Impact
  • Audience qualities
  • Responsiveness
  • Other interesting qualities
  • Success Stories

Overview of YouTube as used for advertising purposes:
YouTube is a video sharing website that allows users to upload personal videos and share them with others. YouTube was founded in February 2005 and was so pervasive and so innovative that Time magazine named it invention of the year in 2006 (Miller). Later, YouTube was bought by Google and the popularity of the site has continued to sky rocket. Recently, advertising has become a big part of the site and YouTube is now coming up with ways to make profit by selling ad space for dominating positioning but advertising can still be done on YouTube for little to no costs as a regular uploaded video.
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Advertising on YouTubecomes in different forms. First of all, anyone can put an ad online just by uploading it on the site like a regular video. This is how many smaller companies choose to run their ads. It is inexpensive but also less effective than some other options because of all the clutter of the competition. There are two different types of self-service adsfor advertisers to consider, promoted-videos and AdWords (YouTube). This type of advertising through YouTube is not over-expensive and it allows for targeting and helps the ad to stand out. A prominent spot on YouTube's home page is now devoted to an advertiser video, which YouTube visitors can rate, share and discuss as they would do with any other video posted on the site. Known among YouTube executives as "participatory video ads," the videos aren't typical commercials (Steel). Then there are ad specs. Ad Specs are the locations that can be purchased on various pages on the site. These ads are seen by everyone and are often interactive (YouTube).

Advertisers are eager to tap into the video-sharing phenomenon by creating advertisements that people choose to view. That's the idea behind YouTube's two main ad products: "participatory video ads" that run on its front page, and the "brand channels" it sets up for advertisers. Like other videos, ad spots can be commented upon and shared. More creative and interesting ads will have a much higher impact because they will be “elected” to be watched. The more views for a video, the higher on the list of results it appears (Morrissey).

Reasons for using YouTube:
One good reason for using YouTube is that it is fairly inexpensive depending on what you plan to do. Another reason is that it is becoming increasingly important in advertising to have an element of engagement with the viewer. YouTube allows for just that through comments, interactive videos, online contests, and more. “Double Click conducted a survey in 2006 that codified the benefits of online advertising.” Here are a few of its findings: A high percentage of audiences interact with video ads; viewers click the play button in video ads twice as often as they click traditional image ads; click-through rates are four to five times higher than with traditional text or image ads; video ads play two-thirds of the way though. Online video ads are quickly becoming the medium of choice to drive both brand awarenessand sales (Miller). The great thing for the audience is that it is up to them if they want to watch the ad or not. There is no commercial video messaging that is interrupting their enjoyment of the entertainment content on the site so they do not get as frustrated as they do with most other forms of advertisements (Steel).

Versatility is another major advantage that YouTube offers. There are a number of ways to advertise on YouTube. Depending on what you are trying to advertise, what the company budget is, and what the desired goals for the campaign are determines which type of advertising would be best to use. These various types of advertising include: ad specs, in-video ads, featured units, self-service ads, interactive videos, and more (YouTube). There is a type of YouTube advertising for everyone no matter how big or small the business might be. Another reason why YouTube is a good marketing choice is its ability to create channels. Once a user posts a video, their channel is created. Then viewers are able to access the channel through a video in order to see all other videos put out by the same person or company (Miller). Advertisers can also buy “dedicated channels" to showcase videos related to their brand -- such as one set up by Adidas called "It Takes 5ive" that focuses on the power of teams, includes a link to an Adidas basketball site and encourages users to submit videos showcasing a basketball and five friends. More traditional sponsorships are also available: Coca-Cola, for instance, sponsored holiday greetings that users could send to their friends (Steel).

Many programs on cable TV only draw less than 100,000 viewers. This however is not the case for a select group of YouTube stars. One comic on YouTube alone yields almost 1.5 million views per day. The typical YouTube star averages 250,000 views per video. This is why brands are taking notice to the growing numbers. GE recently taped 15 YouTubers to make a series of videos for their “Tag Your Green” campaign. In just three weeks the videos have gotten more than 12 million viewers. With YouTube you are hitting a much bigger audience. They are generating more revenue and may attract a loyal audience. (Morrissey,10)

Limitations of YouTube:
The biggest hurdle in advertising on YouTube is filtering. To sell ad space on online videos, a company will have to cite the precise content for the viewer. YouTube can measure how much time a person spends on its site, but currently, there's no way to pinpoint whether someone has chosen to watch clips from The Daily Show or more objectionable content. And for advertisers, being associated with the right content is a crucial reason for buying ad time. As David Poltrack, the president of CBS Vision says: "You have to go through a lot of crap on YouTube to get anything good." In order to get past all the “crap” advertisers need to strive for originality and find a way to interest and engage their viewers (Kaplan).

In addition, many marketing executives are arguing that since YouTube has started increasing its amount of ad space in order to generate some revenue, the site has become too commercial looking. As a result, viewers are starting to get annoyed. Not to mention the amount of competition with all the businesses trying to promote themselves on the site. "It just feels overwhelming in terms of the marketing presence," says Greg Verdino, director of emerging channels for digital marketing agency Digitas (Steel).

YouTube may be the fastest path to getting noticed and creating awareness, but most creators are not making much ad revenue on the world's biggest video-sharing site. Some are not part of the site's partner program that lets creators share in ad revenue and other businesses were unhappy with the returns (Whitney). However this is not to say that all businesses were not happy with the revenue, there have been a lot of successful campaigns as well. It all comes down to carefully preparing the campaign and creating an ad viewers want to see.

Costs of using YouTube:
Thanks to YouTube, businesses both large and small can effectively market themselves through online videos. There is no cost to post an online video to the general YouTube site. The only expense for using this type of marketing is the cost of shooting and editing the video. Advertisers can choose to either do a semi-pro type of filming where they video it themselves or branch out to have the video professionally produced. Obviously to get a professional video made, it is going to cost much more, plus it is thought that “they’re also often too slick for the savvy YouTube audience”. In other words they end up looking too much like a commercial, which is what they should be avoiding (Miller). Although it is cheap, if not free, there is much more clutter to deal with than the paid form of advertisements and often produces fewer results.

Most consider the YouTube promoted videos to be the best choice because they obtain more views and the buyer only pays only for results. When a YouTube viewer clicks on a company’s promotion, they see their video. Media buyers only pay when people click to see their video, not when people see their promotion. This helps to ensure that budget money is only spent on viewers who are interested in their promotion (YouTube). Since Google bought YouTube in 2006, users also have access to Google AdWords for as little as $1 CPM for targeting the entire YouTube site, or $2 CPM for targeting specific YouTube content categories. The other forms of advertising prices vary depending on the type of ad and its content. In order to get pricing for these ads, it is necessary to contact the site (YouTube).

Reach and frequency of YouTube:
The reach and frequency are difficult to determine with YouTube because the ads that are actually watched are mostly up to the viewer. This means that the reach and frequency will be different based on each particular video. However, according to 2008 MRI media data, out of a total of 223,672,000 surveyed, 50,323,000 of them are YouTube users. This is a pretty amazing number considering it was higher than for most other forms of media. Also the MRI data showed that YouTube had an index of 193 ( Other studies show that YouTube has 38 million-plus visitors every month (Steel). YouTube users view hundreds of millions of videos a day. That is more than any TV network, cable network, and social network combine (YouTube). Viewership is also triggered through stimuli that happen outside the YouTube environment. It happens through links that friends are sending around or happens through other elements of a marketing campaign. This helps to increase the reach further through networking (Steel). Although it can be hard to determine reach and frequency, under each video, the number of views the video acquires is displayed. This shows how many times a particular video has been clicked on. This number will not exactly show reach or frequency but it will give the advertiser an idea of the videos popularity.

Scheduling of YouTube:
There is no one type of scheduling that is used in YouTube. It is completely up to the Advertiser as to when the videos are placed on the site. For the basic online advertisement through the site, a video can stay up continuously over a number of years.

Impact of YouTube:
YouTube is a very future forward form of media and it has impacted on a number of things. First it has impacted its everyday users by allowing them to view what they want, when they want. This helps with the problem of ad clutter by making it possible for people to choose ads they are interested in and not waste time with ads they would not normally respond to. This has influenced advertisers to go above and beyond in the creativity and interactivity of their ads in order to be at the top of the game. With all the competition out there on YouTube, advertisers are pushed to stretch the limit and come up with new inventive ways of marketing their business. YouTube is taking creative online advertising to the next level.

Audience qualities of YouTube for advertising purposes:
With over 300 million users worldwide, just about every target audience is on YouTube. Although people of all ages use YouTube, the majority of users are young adults 18-34. Its mostly young audience is easily turned off by hard-sell advertising, industry executives say. "This type of audience that YouTube attracts is very, very fickle," says Chad Stoller, executive director of emerging platforms for Organic, a digital marketing agency owned by Omnicom. "It is very much a 'What have you done for me lately?' audience." If this is the desired target audience, these are some things to consider when coming up with a media plan (Steel).

One unique and convenient feature that the site offers is called YouTube insight. YouTube Insight is YouTube's external facing analytics and reporting product that enables anyone with a YouTube account to view detailed statistics about the videos that they upload to the site. YouTube Insight provides advertisers with information that helps them better understand their audience: who they are, where they come from, what they watch, and when. This will help the advertiser see if their message is getting to the correct target audience (YouTube). Another helpful tool YouTube offers to track viewership is the statistics and data tab. This includes information on views, ratings, responses, comments, favorites, and more (Miller).

Responsiveness to YouTube ads:
One fun thing about marketing with YouTube is that the advertiser is able to immediately view comments and responses from people who have watched the video. This is great for obtaining feedback on how people feel about your ad. Unfortunately, the comments are not always pleasant, but YouTube allows users to manage their comments (Miller). The responsiveness to ads on YouTube varies depending on the success level of each individual video. What a campaign will gain from an individual ad on YouTube depends on how much they put in and how well targeted, original and popular the ad is. The majority of companies have had great success while others have lost money in the process. It all depends on what companies do with their ads and their networking (YouTube).

Other interesting qualities of YouTube for advertising purposes:
YouTube can also be used for much more than just generating sales. “For example, you can incorporate YouTube as part of your product or customer support mix, use videos for product training, and even incorporate YouTube for recruiting and employee communications.” A whole networking system can be made through YouTube for any single business (Miller).

Advertisers who are successfully using YouTube:
Success is measured in different ways. To one company, increasing awareness would mean they were successfully using YouTube, while to another an increase of sales would qualify as successful. A Few examples of larger companies that have successfully used YouTube include Coca-cola, Adidas, and Smirnoff.
More specifically, the “Will It Blend” campaign is a great example of a very successful campaign. Blendtec came up with an interesting campaign for their blenders. The host of the video series, Tom, would have some random item to throw in the blender to find out “will it blend?” These items included everything from footballs to iphones. The campaign showcased the product benefits and since then the total blender sales have increased 500% (Miller).

Then there's the YouTube star, Tay Zonday, who rocketed to viral fame when his "Chocolate Rain" video logged more than 13 million views. He found a way to make money with his encore when he partnered with Cadbury Schweppes Americas Beverages to create the "Cherry Chocolate Rain" video, a sexy, hip-hop music video that features the new Cherry Chocolate Diet Dr. Pepper drink. In the song he sings that he was paid a "hefty fee" for the sponsorship. The video has generated more than 2.5 million views on YouTube (Whitney).

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MRI : Welcome. Web. 29 Oct. 2009.

Ouellette, Dan. (2007, June). best use of interactive. Adweek, 48(25), SR16. Retrieved October 6, 2009, from ABI/INFORM Global. (Document ID: 1295059581).

Steel, Emily. (2007, January 17). YouTube Executive Walks a Tightrope; Marketing Officer Seeks To Introduce Paid Ads Without Losing Users. Wall Street Journal (Eastern Edition), p. B.3. Retrieved October 6, 2009, from ABI/INFORM Global. (Document ID: 1195591961).

Whitney, D. (2008). Web Talent Tests Ads. (cover story). Television Week, 27(3), 1-34.

YouTube - Broadcast Yourself. Web. 29 Oct. 2009. <>.