YouTube Still Growing as a Marketing Tool

Yet another reason for traditional TV outlets to worry about their relevance: YouTube.com, the hot new outlet for people to post and share homemade videos, has caught the attention of big-name marketers.
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Nike, Warner Bros., MTV2 and Dimension Films are among the firms seeding the site with commercial clips. Now, along with consumer-made videos of newborn babies, weddings and teens pulling pranks, is a short of soccer star Ronaldinho in his new Nike sneakers.

Part of YouTube’s lure is its ease of use. Consumers and advertisers can upload clips quickly.
The site, which is like a virtual photo album that hosts millions of short videos, is simple to search.

As broadband penetration grows, and consumer appetite for on-demand entertainment swells, video-sharing sites such as YouTube are taking off.

That buzz has piqued the interest of major marketers, ad agencies and media buying firms.
“From a brand standpoint, it’s become another way to reach consumers,” says Barry Lowenthal, president of ad buying company Media Kitchen.

In a world teeming with cynical consumers and ad-skipping devices such as TiVo, YouTube’s edge is that its users actively seek out content. When word-of-mouth built about Nike’s gritty Ronaldinho clip, consumers e-mailed the video to friends and embedded it in their profiles on social networking sites. It has been viewed more than 3 million times.

The price for Nike? Not much. The sneaker maker shot a digital video, then uploaded it for free.
As YouTube’s must-see status swells, some firms want more formal arrangements. E Networks and YouTube struck a deal for the site to feature various E program clips.

Deep Focus, a marketing firm representing studios such as The Weinstein Co., and MTV2 have both worked with YouTube on promotional opportunities.

Weinstein ran a trailer for Scary Movie 4 from its Dimension Films division. “Within 24 hours, we had 250,000 views of the trailer,” says Deep Focus CEO Ian Schafer. “Within a week, we had a million.”
Deep Focus also placed the worldwide premiere trailer for Clerks II, which Weinstein released with MGM. It was viewed 150,000 times in the first two days, says Schafer.

YouTube won’t disclose financial or other details, but in most cases, those companies get preferential treatment, such as plugs on its home page.

Clips that run as part of more formal agreements are usually marked with the logo of the firm that placed them to let viewers know they are promotional.

Other firms aren’t officially working with YouTube but are uploading videos on their own. To hype Superman Returns, Warner Bros. posted video blogs from the movie’s director.

“It’s fantastic from a consumer research standpoint,” says Lowenthal. “You can type in a search for ‘shopping’ and then see (videos) of people showing their shopping habits. It’s almost like a global focus group — all for free.”
As it grows, YouTube’s challenge is to turn the rising tide of advertiser interest into dollars.

The company expects to reap ad revenue but is cautious. To remain relevant, it needs to serve paying advertisers without looking like a sellout to its millions of average users.
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“We want to be sensitive on how we deal with that,” says CEO and co-founder Chad Hurley. “Because we really are a community, we want to build things for our users and not alienate them.”

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YouTube Co-Founder Compared YouTube to CBS in 1941

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One thing can be said about YouTube co-founder and CEO Chad Hurley: he’s not shy about locating his company’s place in communications history.

Hurley gave the keynote for the digital portion of Mipcom in Cannes, France, today, and compared YouTube to CBS in 1941: that is, fighting for advertiser acceptance and content owners’ fear that it would mean the end of big media which, at the time, meant radio.
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Some important points that Hurley delivered
. “Companies like CBS, the BBC, HBO, Sony BMG, North One and AFP just to name a few, have already joined us.”
. “If you embrace this opportunity, you will evolve your business model and find new channels and opportunities to deepen engagement, discover new viewers and find new, substantial revenue opportunities.”
. “Even if YouTube didn’t exist, other platforms would surely be driving this change.”
. “Around 10 billion videos are viewed monthly online in the U.S. alone. On YouTube 13 hours of content are uploaded every minute.”
. “The online video advertising market is set to be worth over a billion dollars by 2010, will reach over $3 billion by 2012, and over $5 billion by 2013.”
. CBS has had 250 million views of its YouTube channel, and is selling its own ad inventory on the site.

Here’s a wild comparison: “Again, 13 hours of video are uploaded to YouTube every minute. That’s the equivalent of Hollywood releasing more than 57,000 full-length movies every week.”