This guide highlights various aspects of video monetization strategies, focusing on YouTube but also highlighting several other avenues.

Included in This Guide

• How to Monetize Videos on the Web
• How to Monetize YouTube Videos
• The Top Video Ad Networks
• Why You Probably Won’t Get Rich on YouTube

How to Monetize Videos on the Web

While much of the online advertising industry remains focused on traditional banner units, video is claiming a larger and larger market share. Many advertisers are eager to incorporate video ads into their campaigns, embracing this new medium as an effective way to get their messaging across to potential customers online.

For many publishers, the biggest challenge in making money with video lies in the supply. While consumption of video content is skyrocketing, coming up with a meaningful inventory is a tall task. For those publishers who do have popular videos on their site, there is a big monetization opportunity awaiting.

There are several different ways to display online ads, distinguished by when they appear relative to the video content that visitors are looking to consume.

Pre-Roll

Pre-roll video ads are the most common type of video ad unit; they appear before the video begins playing (similar to a preview ahead of the movies). It’s often possible for users to skip over these ads to the content at a certain point:

Post-Roll

Post-roll ads come up once the video has finished playing. This type of video ad is a lot less common, in part because advertisers will generally be willing to pay less for it since most viewers won’t stick around to see an advertisement that’s playing after they have consumed the desired content.

Mid-Roll

Mid-roll video ads are exactly what they sounds like — video that appears in the middle of a piece of content. This type of video ad is far less common than other types of video ads.

Perhaps the best example of mid-roll video ads is Hulu, the online video service that provides access to episodes of popular TV shows. Ads regularly appear during these episodes, much like they would during a normal network TV experience. Here’s an example of a mid-roll ad running during an episode of Modern Family available online:

Traditional Display

Finally, many videos feature traditional display ads appearing alongside the video content. (I.e., they are normal banner ads and not videos.) Here’s an example of a CNN.com video playing alongside a traditional button ad:

Traditional display ads are common on a number of video sites, including YouTube. While the prime real estate is within the video player, you’ll notice that each video home page also incorporates traditional banner ads as well. In this scenario, the video is acting just like a piece of written content would: from a monetization perspective, it’s simply a vehicle for displaying banner ads.

Open Rates Vary

Ads inserted into the middle of a video–when viewers should be the most engaged with the content–were completed more than twice as frequently as pre-roll video ads.

The same study also found that repeat visitors to a site are more likely to sit through a video ad than first-time visitors (85% and 78% completion rates, respectively). Also not surprisingly, viewers were more likely to sit through an  ad inserted into long-form content (87%) as opposed to ads inserted into shorter content such as news clips (just 67%).

Of course, it’s very possible some of these completion rates are inflated by visitors who unknowingly allow a video ad to play fully. For example, ESPN.com combines its traditional written content with videos, allowing an ad to play before the video loads. Many visitors likely read content with the volume muted, meaning that the ad plays fully even if the viewer is never engaged.

How to Monetize

The options for monetizing video content are generally similar to monetizing standard Web pages: you can either sell ads directly to a relevant advertiser, or partner with an ad network to deliver ads to your audience. The former requires much more work, but will likely yield significantly higher revenue. The latter is quick and easy to implement, but involves sharing revenue with the network partner.

Video Ad Economics

Before diving into the technical aspects of video monetization, it can be helpful to understand what it takes to make those efforts worthwhile. As mentioned above, many publishers lack the supply of video inventory in part because creating this video content is time consuming and can be expensive.

On the bright side, video ads generally command premium rates from advertisers. (Compare to average CPM rates.) Some data points include:

• According to AdExchanger, CPMs for online episode players are in the $21 to $30 range, while video with professional content comes in at $11 to $20.
• eMarketer estimates the average eCPM for online video ads to be almost $25, and rise to almost $26 in coming years.
• ReelSEO estimates Hulu’s eCPM for video ads to be about $27.50 for 2013.

Though the exact earnings opportunity for each site can vary, that should give a good picture of the economics here. If your videos are being viewed 1,000 times each month, it’s probably not worthwhile to think about direct advertising relationships (since you’ll be grossing a couple dozen dollars at best). If, on the other hand, you’re serving up millions of videos a month, you might be sitting on a gold mine if you’re able to come close to matching the above figures.

Technology Solutions

If you have both an inventory of videos to run on your site and relationships with direct advertisers who want to run their campaigns on your site, the next challenge becomes finding a technical solution that allows you to serve video ads and measure their performance.

If you have video inventory but aren’t interested in building those direct relationships, you’ll be in the market for a video network to monetize for you. In many cases, these products overlap; video ad platforms will let you serve ads you sell directly while monetizing any remnant inventory through their network (basically how DFP works for display ads).

If you are in search of an amazing video ad network we would like to highly recommend vi.ai. They have this feature named vi stories which run in multiple scenarios and they have one of the top performances we have ever reviewed by far.

vi stories work with any of the following scenarios

• Both video content and demand coming from vi
• Video content from vi + vi demand + publisher’s direct demand
• Publisher video content + vi demand + publisher’s direct demand

Aside from vi.ai here are some of the platforms worth checking out include:

• BrightRoll (ad network)
• YuMe (ad serving and network offerings)
• spotXchange (ad serving and network offerings)
• DFP Premium (ad serving and network offerings)

Bottom Line

Video advertising is going to continue to increase in coming years, and publishers with inventory to monetize will find themselves with a big opportunity. While monetizing video isn’t quite as easy as the display side of the business, the opportunity to command premium CPMs may be too big to ignore.

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How to Monetize YouTube Videos

Video continues to become an important part of a well-rounded online strategy. As advertiser demand skyrockets and the means of consuming online content continues to evolve, more and more sites are starting to regularly produce video. While video monetization is still a relatively novel concept, the amount being spent is growing rapidly and there are a number of success stories already.

To put the video advertising industry in perspective, here are a few stats:

• Estimated gross ad revenue for YouTube in 2013 was $5.6 billion, with about $2 billion in net profit.
• 86% of brands plan to increase video ad spends in 2014.
• YouTube had almost 158 million unique viewers in January 2014.
• Americans viewed almost 27 billion video ads in January 2014, with time spent watching video ads equal to about 10 billion minutes.

Read more on How to Monetize YouTube Videos.

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The Top Video Ad Networks

Video ads are a relatively new concept for many publishers used to monetizing their properties through traditional banner ads. While the overall spend on video ads remains relatively small, it’s growing significantly each year and is expected to continue to climb into the foreseeable future.

For publishers who have their own video inventory, there are a number of potential strategies to monetization. Ideally you’d find an advertiser to whom you can sell directly, and keep the entire proceeds for yourself. More realistically, publishers with monetizable ad inventory will turn to a video ad network to handle the sales for them. In this article, we’ll profile some of the largest video ad networks out there.

Read more on the Top Video Ad Networks.

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Why You Probably Won’t Get Rich on YouTube

For most of us, YouTube is a great way to share videos with family and friends or to kill a few minutes during the day with some free video entertainment. For many, however, YouTube is a full-time job. Billions of dollars are spent each year on video ads that run in YouTube videos, allowing the makers of popular videos to generate passive income streams from their contributions to the site.

Making a few dollars of revenue on YouTube is easy enough; it can be done with a basic webcam and a few hours of spare time.

Generating a meaningful revenue stream from YouTube is much more challenging, and a feat that only a very small percentage of YouTubers ever accomplish. In order to make real money from YouTube, you’ll have a few major challenges to overcome. Below we’ll highlight while many YouTubers fizzle out after only a bit of revenue and a handful of videos.

Read more on Why You Probably Won’t Get Rich on YouTube.

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