YouTube Making Advertising Headway

    February 19, 2009

Two days ago, a financial analyst downgraded Google’s stock and said we’re in the middle of a media recession that will last for another seven or eight quarters.  Today, a different one popped up with some better news: YouTube’s selling more ads to increasingly important companies. 

YouTube Logo

Yes, you can bet that Piper Jaffray’s Gene Munster just made himself a little more welcome at the Googleplex than ThinkEquity’s William Morrison.  According to Rory Maher, Munster looked at the top 100 clips on YouTube during a week and found, "29 percent of videos had an ad versus 25 percent in January and 30 percent in December."

Such a quick bounceback following the holiday season is impressive.  Also, "72 percent of the ads displayed were in-video ads versus 52 percent in January and 63 percent in December," so YouTube’s making progress in that corner, too.

Finally, Adidas, Chevy, Disney, Kraft, Verizon, and Xbox have apparently decided to test YouTube’s advertising waters, which means the video-sharing arm of Google is in contact with some very deep budgets.

If YouTube can sustain these trends without alienating users, harsh comments concerning its profitability might have to stop, and comparisons between it and Hulu may take on a different tone.