YouTube Brings Mobile Ads to Revenue Mix

Site Serves 'Tens of Millions' of Videos to Phones Each Day

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NEW YORK ( -- YouTube has spent the past year putting ads in every corner of the site, from big, splashy homepage ads to pre-roll, post-roll and overlays on video. But one aspect has remained curiously ad-free: its mobile site.

A Mazda ad is seen on YouTube's mobile site.
A Mazda ad is seen on YouTube's mobile site.
That's about to change. Mobile ads are YouTube's latest offering to Madison Avenue, and three advertisers are giving it a whirl: Mazda, Kia Motors and Sony Pictures for "District 9." YouTube tested mobile ads with L'oreal and Land Rover last summer.

Making these ads viewable on mobile phones is no small technical hurdle in that they have to be encoded in a mobile-friendly format because most mobile browsers can't handle Adobe's Flash. Shishir Mehrotra, YouTube's director of monetization, said in-video ads on mobile are on the way, but that's an even tougher technical problem given the varied handsets on the market.

Mehrotra said YouTube's mobile site -- distinct from YouTube's mobile app on the iPhone and other platforms -- serves "tens of millions" of views per day and has grown 160% in the past year. While that's vague, it means even on the low end that YouTube serves more videos to phones than just about any other site serves video to PCs, save perhaps Hulu. Short of a mobile ad network, Mehrotra said, "it's one of the largest mobile buys you can get."

Who wants to advertise on YouTube's mobile page? Pretty much the same advertisers that buy the home page -- those accustomed to transacting in roadblocks where they "own" a site for the day. Indeed, on Wednesday Mazda bought both the YouTube homepage and the mobile site.

Those advertisers aren't necessarily the same advertisers buying video ads, a trickier proposition and one YouTube must figure out if it wants to scale revenue exponentially, but it is another incremental source of new revenue.

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