The YouTube Gold Rush

YouTube has traveled a long way from its humble beginning in 2005. In just a short span of over 12 years it has built one of the largest online video repository. With ad revenues of over $2 billion USD, YouTube is fast turning into one of the most preferred place for online adverting by global brands.

YouTube is trying to position itself as an alternative to the traditional TV advertising. For achieving this position YouTube is actively undertaking initiatives such as funding popular original channels. “upfront” selling of advertising inventory to major marketers for the whole year.

The Begining

Source: http://www.davidhay.org/

To attract greater number of viewers from across the world, YouTube started paying channels that had thousands of subscribers and millions of views. Thus,YouTube entrepreneurs were born whose primary goal was to make unique , attractive, entertaining videos which could attract the highest number¬†views and subscribers. Original User Generated Content (UGC) was highly essential to attract large number viewers and make money. YouTube pays a certain amount of money ($0.25 – $2) per 1000 views. When these views get converted to millions of views people start making large amount of money. There are plenty of stories around on the internet where people have bought Lamborghini’s just by making money off YouTube.¬†But it ain’t as easy as it sounds. These highly paid YouTubers put in a lot of time and effort to make these videos.

Marketers Gain

These young YouTubers give the brand marketers the reach and visibility which they require. In a conventional TV advertising the advertisements are broadcasted to all segments of customers. These are called “mass media” for this very reason. As advertising get sophisticated it has become very important for marketers to target the right customer with the right advertisements.

This is where YouTube plays the messiah. By identifying the relevant users visiting a particular YouTube Channel and the type of content on that channel, marketeers can target specific categories of customers.

This makes it a win-win situations for all the stakeholders involved i.e. YouTube, Marketers and YouTubers. Everyone gains in this.

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