Analysis: YouTube through AdSense

This may be old news for most of you, but I discovered this today. I was just playing with my Adsense account to add some more advertising content to my site www.vishalsood.com and voila! I see YouTube in my Adsense account. Adsense now allows me to show some syndicated videos with ads in them. I had read about YouTube was now showing Ads but seeing is believing.

How does it work?

This is how it works - it gives me a way to add a player like the one below to my site and every time you watch a video (please do so below so that I can make some dough;)), you will get ads in the form of overlays, banner, etc. This is a great handshake. This is specifically good for so many blogs, sites showing YouTube content and for Google - this helps both make money. I decided against this for my site for now as the player is too big and I don't have a video flavor to my site yet. It would really nice to see they doing something similar to MSN, where they had a tiny player that fits into a side bar.

YouTube in the model below has two kinds of ads going. First one is a permanent overlay at the top left corner. I must admit, I totally hate this. It is very intrusive and blocks the view of my video. To add to it,you hopelessly have to sit and stare at it –having no way to get rid of it. The second one is the one I don't mind. It is an overlay that appears in the video above the seek bar. It appears after approximately 30 seconds into the video (check it out below by playing the video). There is an easy way of dismissing it by clicking on the close button (a x in the top right corner of the overlay. It is  translucent so you can still see some videos. In all, there are two ads going with model.

How can I control what videos play?

This is an important question, I would always like videos pertinent to my site's content to play. There are some controls possible with Adsense management console. You can chose what kind of videos play by either choosing keywords, categories (from a fixed list) or channels (an Adsense stream essentially). You can click the image below to get a good feel of how management console looks.

In addition to below, you can also control the skin of the player, etc.

How much money are we talking about?

So, the next not so obvious question is how much will Google be making? When YouTube started showing Ads like this they were asking for $20 CPM (Cost Per Mille) but now they are in the range of $15 CPM. In simple terms Google(YouTube) will make $15 for every thousand impressions of the ad served by YouTube. In case you know the exact amount, please add a comment to this post. Also, if they offer you less, beat them to it (just kidding).

If you trust ComScore data and take the 3.4 billion YouTube videos served per month or 45 billion annually(after adding some growth for fun), you come up to a figure of $675 million. Before you fall off your chair, not all videos on YouTube are monetizable, they only sell ads on contracted partner videos. According to Bear Sterns, You Tube is set to generate $22.6million in revenue for video ads, about 3.3% of possible $675million

So, are you excited the way video is going? I am :)