Google to share ad space on YouTube

Google could soon allow a number of big media partners to sell their own ads on YouTube, in a move designed to consolidate the media industry’s support for the video-sharing website and boost ad revenues. Videos containing content from the big media partners generate most of YouTube’s ad revenues, despite representing as little as 5% of all videos on the site.

A small number of big partners, such as CBS, already sell their own ads on the site, but so far the numbers are small. Industry sources say that the scheme could be extended to many more firms by the end of the quarter.

The scheme will mean that selected firms can sell ad space both on the videos streamed from their own YouTube channels, and on user-uploaded videos that contain copyrighted material. The scheme will rely on YouTube’s Content ID system, designed to identify user-uploaded videos comprised entirely or partially of copyrighted content.

The big media companies are likely to jump at the chance to sell their own ad space on YouTube. It will give the firms control over the ads which appear beside their content and could make them more money. Most media companies believe their existing ad sales teams could command higher ad rates than those YouTube can offer.

For Google, the aim is to bring more high-quality, revenue-generating content online as this drives traffic. Though YouTube will be surrendering control over some of the ad inventory on the site, it will still take a cut of the ad revenues the media companies manage to generate. In addition, the scheme sends a clear signal that Google wants to work in partnership with the media companies. As far as this helps avoid costly legal battles over copyrighted content this is a shrewd move.

The news comes as Google is extending the options available to advertisers in other ways. The search giant is expanding its YouTube eCommerce programme by launching the service in Germany, Spain and the Netherlands. The system shows users product ads related to the videos they are watching and now includes transparent overlays that pop up while the video clip is playing. Though the returns on the programme are unlikely to make a large dent in YouTube’s overall revenues, the move is yet more evidence that Google is pushing to monetise the video site through new advertising strategies.