Silicon Alley Insider yesterday wrote up the latest bad news for Google as it struggles to monetise it’s media assets. Despite showing around 1bn video clips per day YouTube revenues are only expected to come in at around $200m this year.
Running the calculations that comes out to CPMs of around $0.5 (making the rough assumptions of a flat 1bn views per day and that one video view equates to one page view). This is on a par with other social media – probably better than the big mainstream socnets like Facebook and Myspace, but less good than the CPMs achieved on niche sites like WAYN.
$200m revenue two years on from the $1.6bn acquisition isn’t much – as I’ve said before, I wish the current results were doing more to justify the valuation.
Unsurprisingly Google are trying hard to improve monetisation – the other disappointing thing about the announcement yesterday is that despite Eric Schmidt’s earlier promises to the contrary they haven’t got any clever new ideas that are going to make the difference.
Instead they are going to introduce pre-rolls and post-rolls.
This goes against the grain for Google in that it lets advertising detract from the consumer experience, but I welcome this part of the announcement. Advertisers are keen on these formats so hopefully they will drive good revenues. And, probably more importantly, it could help increase tolerance levels for interrupt advertising on the web more generally – to the benefit of entrepreneurs and their investors everywhere.