Advertising on Viral Videos: More Beneficial than Regular Streaming Clips?

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					                                                 DIGITAL MEDIA
                                                 Advertising on Viral Videos: More Beneficial than
                                                 Regular Streaming Clips?




                                                 Lead Analyst
                                                 Kristin Knox

                                                 Contributing Analyst
                                                 Michael Gartenberg




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Advertising on Viral Videos: More Beneficial than Regular Streaming Clips?
Catalyst: YouTube recently announced that it will increase advertising on uploaded short-form videos,
hoping to better monetize those that ultimately go viral. Are advertisements placed in conjunction with
viral clips worthwhile?

Core Questions:
   1. How is YouTube planning to monetize viral videos?
   2. How do viral videos compare to overall streaming short clips when serving as hosts for online
       advertising?
   3. How can advertisers capitalize on viral videos to better reach their target audience?

Interpret Insight:
YouTube’s new agreement to place ads on a greater number of popular user-generated videos will
undoubtedly result in greater numbers of ad views, particularly on clips that do ultimately become viral.
As viewers seem to better recall the brands and products featured around these popular clips, such viral
videos seem to offer a stronger platform for advertising than short clips in general. If YouTube and its
advertisers can also strive to make their messages relevant to the host videos, the overall viewing
experience can be improved for consumers, and marketing messages can be conveyed more clearly to
their target audiences.


YouTube Incorporating Ads on More Uploaded Content
YouTube announced recently that it would amend its long-standing, stringent requirements for
participants in the site’s advertising partner program. This program allows individual uploaders who
contribute popular, original content to the site to partner with YouTube in placing banner or overlay ads
next to their videos in a mutually beneficial revenue-sharing arrangement. Previously, in order to sign
on as an ad partner, site users had to be high-volume uploaders with strong online followings, posting
new videos regularly that were each seen by thousands of visitors. Such past restrictions, however,
means that only a fraction of YouTube’s voluminous content currently carries advertising. According to
an analysis by TubeMogul, only about 37% of the website’s 100 most popular videos currently host ads
of any type, and the majority of these are some form of professionally-produced content claimed by a
larger corporation (such as music videos or promotional clips for movies). Of the top user-generated
videos, only about 2% display related advertising, whether banners or video overlays.

Now, however, instead of dealing only with the most prolific posters, YouTube will consider forging a
one-time partnership with any uploader whose single video begins to attract thousands of views,
providing that the video does not run afoul of copyright law. By widening the field of content that is
available to host advertisements, YouTube hopes to capture those videos just on the verge of going
viral, exponentially increasing ad views and thus revenue. Piggybacking on viral videos and harnessing
the power of human social networking, however, will likely generate greater returns than simply an
increase in eyeballs for each ad. Viral videos may in fact prove to be the superior host for overlays, as
consumers have been found to have better ad recall from watching these videos than from watching
online short clips in general.
Better Product Recall in Viral Videos
The social network-friendly nature of ‘viral’ videos suggests that one working definition for the term is a
short, streaming clip viewed online because it was recommended to the viewer by someone else.
According to Interpret’s syndicated Online Video Consumption and Engagement Study, about 28% of all
short clips, whether news stories, music videos, animal clips, sports footage, or some other type of
content, are referred from another source, particularly a friend or family member. In contrast, almost
half of clips are found by randomly browsing online or through other streaming videos, while one-fourth
are viewed by Internet users who already knew about the video beforehand.

It is the v
				
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Description: YouTube recently announced that it will increase advertising on uploaded short-form videos, hoping to better monetize those that ultimately go viral.� Are advertisements placed in conjunction with viral clips worthwhile?
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