According to AdWeek, the video sharing site YouTube is rolling out a new advertising model in order to monetize the vast amounts of content hosted on the site. YouTube is selling sponsorships rather than TV-style demographics. The value for the sponsorships (which include display, overlay and pre-roll) run to an annualized $4 million to $6 million, depending on the channel, with the pre-roll coming in on the high end of the industry average—about a $20 CPM.
Rob Weiss, CCO of EQAL, which is producing fashion and beauty channel U Look Haute (which debuts next week), said he likes the flexibility of the model. “We have four shows, and another five or six planned over the next couple of months,” he said. “You have to constantly refresh the content.”
EQAL CEO Miles Beckett, of Lonelygirl15 fame, said he was glad to see more ready cash in the industry. “I think this would have happened earlier, but there was literally [an eight-month stretch during the downturn] where every company in the U.S. froze their marketing budgets.” Youth, said YouTube’s video sales head Lucas Watson, is an asset he takes seriously. “[The channels] are going to have very strong appeal among a young audience already very loyal to YouTube.”