Will Video Search Ads Be YouTube's Money Mint?

Google's Video-Sharing Site Is Racking Up as Many Queries as Yahoo

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NEW YORK (AdAge.com) -- Google is borrowing from its most successful money-minting product, search ads, to goose revenue on its video-sharing site YouTube. The move comes just as YouTube's search traffic has passed that of the No. 2 search engine behind Google, Yahoo.com.
McCain Google search

Paid search results appear under the heading 'promoted videos,' link to the advertiser's YouTube Channel and are sold on a cost-per-click basis.

The paid-search results appear on the right side of YouTube's search-results pages under the heading "promoted videos." The ads have a thumbnail image and a title and brief text, like AdWords, Google's ad marketplace that also matches keyword-targeted ads against search queries. The ads link to an advertiser's YouTube channel and, also like AdWords, are sold on a cost-per-click basis. The ads are not, however, bought through the AdWords system.

Uncharted territory
It's unclear whether YouTube's video search ads will be as effective as search ads on Google.com, because video search is a different animal than normal web search. People are often looking to be entertained when they do a video search, which is a contrast to the more varied -- and often commercial -- nature of searches on Google.com.

If YouTube can make search ads work, it could be huge for the site, which has massive amounts of video search traffic. According to ComScore's Extended Search Query Report, which breaks U.S. search data down into sub-domains of the top search engines, in August (the most recent figures publicly available) "YouTube/other" accounted for almost 2.6 billion searches -- trumping Yahoo.com's 2.4 billion. (Google.com had 7.6 billion search queries.) YouTube's figures dwarfed MySpace's 585 million searches and Facebook's 186 million searches.

Current YouTube search advertisers include the movie "W," University of Phoenix and Simple Shoes, all of which have been showing up against a search for "John McCain" for the better part of a week. Simple Shoes' most popular video has fewer than 2,000 views; University of Phoenix's channel has just under 13,000 views. BarackObama.com is advertising against the candidate's name, and Home Depot is buying video search ads as well.

Formula may be refined
If the targeting in that example seems less than relevant, it's because the pool of advertisers is small as YouTube beta tests the format. Ad Age has also heard quality controls are under development to bring the format more in line with Google's regular search ads, in which placement is a combination of quality score and bid price.

A YouTube spokesman declined comment on the test.
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