TubeMogul did some finger pointing this week showing that YouTube is showing ads on less than 50% of their top 100 videos. Why? Read more!

I just read something else that said the channel on YouTube is the most popular channel at the site. I'm wondering if they run their own ads on the channel. If they're that big they probably have some leverage.

Anyway, TubeMogul states that 42% of the YouTube top 100 videos have ads placed on them. They say this will need to change if they are going to contribute any type of measurable income to the Google bottom line.

YouTube Restrictive On Ad Placement, Still youtube chart of the day 600x450

Source: Silicon Alley Insider and Tubemogul

Well, considering that you can't show ads unless you own all the rights to every little tidbit of a video and are a YouTube Partner, that's no surprise is it? But with only 17% of the top 100 content showing up on the site now user generated, the big question is, what the hell is YouTube doing? Less than a fifth of all new content (in the Top 100 for clarification on those who suggested that I meant all content)  is user generated. That means that most of those videos should manage to qualify for the Partner program and be eligible for ad placement. Obviously, there's some serious issue over at the GooTube.

Youtube has been trying to increase the amount of professional content on the site over the past year and they have been successful in doing so.  But if only 17% is user generated and they are looking for more professional content, what does that say about the content being generated at present? It's not user made and it's not professional, so where does that leave it?

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Well, 33% is pirated says TubeMogul, so add that to the user generated and it's 50%. Plus the 42% already showing ads that technically means there's only 8% that they can grow their ads for the top 100. Unless that 17% is actually good enough to host ads as well, then it could have 25% possibility for growth.

More professional, premium content is certainly an option. But how long and how many users will tolerate ads on that content? Plus, if they go to a subscription model, who would pay to watch content that also shows ads? That's the whole point of a subscription model right? No ads?

Speaking of ads, TubeMogul said 94% of those ads showing on the Top 100 are display, 5.53% are pre-roll and 0.9% are overlays. Obviously, they know that users won't tolerate pre-roll on YouTube content so they seem to be downplaying that aspect of ads.  That being said, a year ago, there were no pre-roll so it is clear that they've changed their opinion of pre-roll somewhat in order to generate revenues.

It certainly is quite the conundrum. They don't have good content that qualifies for ads, they want premium content and have looked into subscription models. But they certainly can't do both at the same time unless it's pay to not see the ads which probably wouldn't be as profitable.

  • mikeorourke

    A Very interesting article which in many ways is the prime example of the wider internet debate on how to get money out of content.
    One possible way to change up the situation is to look at a proprietary currency - like a loyalty card - that allows users to charge up credit in one way and then spend it in another. Perhaps something similar to the Pay While You Surf Adbar craze late 90's or Credits for Questionnaires - it would take a pretty inciting syndication to make it work - Youtube could be an interesting partner in it. The main benefit for the 'supplier' is the easily converted source of value and for the user an un-interrupted content experience. Just throwing ideas around.....
    Great post though, thanks for the thoughts...

  • tubemogul

    Thanks for the thoughtful write-up! That said, I'm amazed at how everyone is taking such a negative spin on this. The number of videos with ads is growing by 0.83% per month. YouTube is making huge strides in becoming profitable and this data bears that out.

    • Mark Robertson

      Dave. I agree with ya. Huge progress YOY..

      Mark Robertson

  • Jeff Martin

    "But how long and how many users will tolerate ads on that content?"

    I think viewers will tolerate ads on content as long as they see value in the content itself. Im def not a fan of pre-roll, however I find the less intrusive overlays and displays that temporarily appear on the bottom portion of the videos are usually tolerable. Not to mention we have the option to 'x' our the ad spot altogether.

    As a producer of hi-quality content I can understand YouTube's goals here in regards to content types/formats. This is an example of the "Internet is a cesspool" comment (in regards to information searches which dominate search) that Schmidt made and how brands can be the answer. After all, if Nike makes athletic shoes then they are probably qualified to put out some great content around the subject - and that would make sense to viewers. Then you couple that with relevant targeted ads (YouTube still has a way to go with this) and also highlight supportive UGC (or have expert brand content support great UC content) and you have a more winning combination - for everyone.