YouTube’s slow march to riches is supposedly going slower than many had hoped. Ad revenue will reach $200 million for the year, short of Google’s (NSDQ: GOOG) expectations, two sources tell WSJ. One source says a review by Google North America advertising president Tim Armstrong had identified 105 problems with YouTube’s ad sales operation, which is “hamstrung by inefficiencies”. And Google has cut back on ads served against clips that could figure in copyright disputes, WSJ added, again unattributed.
It would be a travesty if a site which commands over a billion video views each day and ingests 10 hours of new video each minute couldn’t meet the opportunity created by its $1.65 billion acquisition. Nervous about alienating its massive audience, it’s so far shied away from even the briefest of pre-rolls. It last year launched overlay ads, but these have not been widely implemented. Now WSJ says YouTube will adopt pre- and post-rolls. As context, YouTube charges at least $175,000 a day for homepage sponsorship.
Armstrong’s effort to unravel YouTube’s ad operations is supposedly nicknamed “Project Spaghetti” and scheduled for completion by Q3. Google’s response – it’s learned a lot about what works “over the past several months”.