YouTube overlay ads because of partner pressure

Could YouTube’s latest decision to show overlay ads have been forced by partners such as Universal?

I thought I would check out Universals numbers. Universal have been uploading music videos to youtube for 8 months. In that time they have uploaded 4211 videos and have achieved almost 330 million views.

First off, just so you know what I am talking about, you need to look at a partner page. So check out this shizzle with the D.O double gizzle. Instead of the standard layout, they get a Google ad along with one of their own ads and a “More Videos From This Channel” box.

Now Lets do the maths for these Google Ads. I’ll be generous and assume YouTube has a CTR of 1% on their partners pages, which equates to almost 3.3 million clicks over 8 months. Now say we assumed that each click was $0.10. That brings the total revenue from Universal’s partner page to almost $330,000 over the 8 months. Now not forgetting that the revenue has to be split between Universal and YouTube. A 65/35 split YouTube’s way is likely, which puts Universal’s revenue from YouTube at $115,500, or less than $15,000 per month.

That is just my estimate, other sources suggest that the situation might be much worse. On the Plentyoffish blog, Markus says that just over a year ago, he was paying just 30 cents cpm for ads on Youtube. Using that estimate Universal could expect to see just $34,000, or $4,300 per month.

$1 per video per month!!

I doubt they were the sorts of numbers Universal had in their head 8 months ago after deciding to partner with Google instead of sueing them.

So there is basically 2 ways for google to hold on to Universal and their other partners.

1. Share more revenue with the partners and keep less for themselves.
2. Maintain the same share percentage and increase the total revenue.

I think we all know which one makes more sense.

Whilst Google have probably always had this overlay idea in their mind and had always planned to implement it, if my guestimations are anywhere near accurate, then Google’s partners probably are having a big influence on Google’s decision.

If my maths is way off, then please let me know with a comment and tell me what an idiot I am.

Filed under: Case studies, Marketing. Maybe online, maybe not by Ryan