Home  › Media › Video
youtube2

YouTube Market Forces

  |  July 2, 2013   |  Comments

YouTube is where the traffic is, so brands with video content to distribute and monetize would do well to have a presence on the platform.

An interesting debate has emerged in the last few weeks over the value of the views that videos (and video ads) receive on YouTube.

It all started with an eyebrow-raising blog post (and companion video) by Jason Calacanis about why he turned down funding from YouTube to create original content for the site. Shortly after, rumors emerged that Maker Studios - one of the main YouTube "studios" - was mulling creating its own post-YouTube video site.

The issues at play revolve around two common themes. First, there is no viable video competitor to YouTube, at least not in terms of overall reach and volume. Second (and obviously related) is that partners are beginning to chaff at YouTube's business policies, most notably: the 45 percent cut of advertising it takes, the lack of any marketing support, and the lack of a dedicated YouTube ad sales force.

To be sure, YouTube is making efforts to increase the revenue stream it offers partners. It added paid subscriptions (the jury on which is still out) and has jazzed up its mobile advertising efforts to the tune of an estimated $350 million in the last six months. But at the end of the day, YouTube should be viewed as a customer acquisition tool in addition to a monetization tool.

Simply put, YouTube is where the traffic is. Not every content publisher is a Vevo or a Hulu, with the cash, exclusive content, and major-label/studio clout needed to carve out its own presence online. So brands with video content to distribute and monetize would do well to have a presence on the platform. The question then is what to do with the attention received.

A branded video app, optimized for all platforms (mobile, tablet, web, and more) is one answer. Let's consider for a moment the value of a video view on YouTube versus the value of a view in a mobile app.

First, mobile apps drive higher engagement. As I've stated in a previous column, the most active mobile video users are those aged 18 to 34 years old. Somewhere between 35 to 50 percent of these users choose to view video on mobile over other formats (to be clear, this stat refers to mobile views within branded apps, not mobile browser video views). Second, video apps deliver higher CPMs - today, anywhere from two to three times the CPMs of online video advertising.

Taken together, I estimate the opportunity cost for not augmenting a YouTube channel with a mobile app is anywhere from hundreds to thousands of dollars per month in purely advertising revenue, depending upon the popularity of your YouTube channel - on top of which, an app adds the opportunity to offer e-commerce, subscription, and In-App purchasing to your most engaged fans. So a smart play is to use both YouTube and an app strategy together for the best revenue potential.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

ABOUT THE AUTHOR

Frank Sinton

Frank Sinton is the CEO of Beachfront Media, a video solutions platform for publishers, advertisers, and enterprises. Previously, he worked for Sony Pictures Entertainment as Executive Director of Architecture. Beachfront Media is the everywhere video company that provides solutions for video discovery, video syndication, and video app development for managing and monetizing video applications across screens and devices. For More information, please visit www.beachfrontmedia.com.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Media newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...