YouTube and the Challenge of Video Ads

RT’s one minute, 24 second footage of the Siberian meteor blast has gotten almost 30 million pageviews in six days, an extraordinary number according to the Russian TV channel. Total views of all videos of the event are even more impressive. But what stands out as much as the number is the lack of advertising that accompanies the content. In a nutshell, this is YouTube’s challenge, to garner enough revenue to make it an important contributor to the revenue of parent Google Inc. (NASDAQ: GOOG).

RT said in a press release:

The blast, which hit Russia’s Chelyabinsk region on the morning of February 15, became the most watched video event of all time with 138 million views, and the fastest video event ever to hit 100 million views, according to VideoMeasures, an online measurement company. More than 400 videos across several online platforms were tracked in this calculation.

That one minute, 24 second clip does not open with an advertising message of any kind, despite how long it has been posted. Neither do most of the other widely watched clips of the event. Some advertiser somewhere must have seen some benefit of all of these “eyeballs,” but no one at Google, or any other firm that could profit, made any money.

The YouTube problem could stem from several things. Among them is the “CNN problem.” Big events draw large audiences. But the shows that cover them often do not run many ads, or when they do, CNN likely cannot capture high rates from advertisers who have not committed upfront to extra expenditures. Or worse, YouTube has no capacity at all to get to major advertisers quickly with the opportunity to reach millions of people fast.

With the exception of music videos, many of the most popular videos on YouTube do not have ads that run with them. Take all those new “Harlem Shake” videos.

But all is not lost. “Gangnam Style” starts with an ad.