YouTube hands over ad sales to publishers

YouTube has struck its first deals allowing publishers to sell advertising around their own content on the video-sharing site. Bauer and IPC Media are the first magazine publishers to sell advertising themselves on their channels for popular magazine brands including NME, Nuts, FHM and Kerrang!.

NME Awards

YouTube’s move to open up sales beyond its internal team comes as the online video leader, purchased by Google for $1.76bn in 2006, strives to turn a profit. Consultancy firm RampRate estimates YouTube’s losses at $174m, while Credit Suisse analysts predict a far higher $470m.

YouTube is working more closely with media owners to deliver better revenues. The agreements with publishers come after Channel 4 became the first broadcaster to sign a deal to sell advertising around its own content in March. Last month it signed a deal with Myvideorights (nma.co.uk 18 June 2009).

Patrick Walker, head of partnerships for YouTube EMEA, said the deals were a way to enable publishers to sell beyond their own sites. “It gives them additional inventory. We’re not actively seeking these deals but we are open to them. We want to maximise revenues across these channels,” he said.

Sam Finlay, group ad director for IPC Ignite, said, “We’re directly monetising our content, which we put up on our site as well. It expands the reach of our commercial partners and gives us extra reach.”

Kurt Edwards, head of digital sales at Bauer Media, said this was a new revenue stream for the publisher. “It’s another box ticked. It’s about brands making sure they claim their content.”

There was furore surrounding ITV and YouTube in April after Susan Boyle’s performance on Britain’s Got Talent was viewed around 70m times on YouTube. ITV missed out on an estimated £1.3m in ad revenues because no ad deal was in place.

A source at ITV said the broadcaster was still striving to make a deal with YouTube. “We’ve been trying to work towards that,” he said. “It has to be our end goal. We sell out of our video-on-demand space so this would be additional space to sell.”

Channel 4 said its deal with YouTube ensures consistency across its content. “We control the pricing around our content. It also ensures our content is brought to a broader audience,” said Errol Baran, Channel 4’s head of new media advertising.

YouTube will continue to sell ads on publishers’ sites through bundled deals. For example, if a brand wanted to target sports users they could advertise across content which could include Bauer’s Motorcycle News.

Analysts agreed it’s a sensible move for both YouTube and media owners. Ian Maude, an analyst at Enders, said, “Media owners know their content better than anyone and this gives them extra reach. Plus it’s about Google recognising it needs great content to help YouTube stay the number one video site.”

This story first appeared on newmediaage.co.uk

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