YouTube Introduces AdSense-Like Feature

YouTube (s GOOG) today announced it will now include videos from paying advertisers alongside relevant recommended content on video-watching pages. The tweak brings the site’s AdWords-like tool for contextual video ads on search results pages (which launched last fall) to other parts of the site. It is similar to Google’s massive AdSense program for monetizing web pages with cost-per-click text ads sold on a keyword auction basis, but instead monetizes video pages with video thumbnails linking to cost-per-click advertiser videos. As Google does with AdSense, YouTube will share revenue from the ads with the video page’s content owner.

PV watch 2Like YouTube’s other ad formats, promoted videos will only be shown on pages where the site has a revenue-sharing partnership with the content producer. YouTube says views of partner videos (and therefore monetized videos) have tripled in the last year, and it is now monetizing hundreds of millions of video views per week.

Typically, though not always, when a promoted video is shown on a video page there will be only one of them, said YouTube product manager Matthew Liu on a call with NewTeeVee today. He said YouTube is working to improve its contextual targeting, and has been able to raise click-through rates since first launching promoted videos in search. The number of clicks on such ads has tripled in the past six months, Liu said. YouTube will not only be using content from video pages to target keywords a la AdSense, but also experimenting with analyzing YouTube-specific signals such as video metadata and user engagement.

Liu said advertisers from the entertainment, how-to, auto, and consumer-packaged goods verticals are all making use of promoted videos, and that participating advertisers include brands big and small. He described a method for daisy-chaining YouTube ad formats together to achieve a direct response, in which an advertiser could use a promoted video to drive traffic, and then use a recently launched call-to-action ad on the video itself.

Google had recently shut down an AdSense video unit product which enabled regular web sites and blogs to embed video from YouTube partners, accompanied by in-video ads. The company said in March the program “hasn’t had the impact we had hoped for,” and closed it at the end of April. Today’s product, considering it matches YouTube content with YouTube promoted videos, is probably better aligned.