YouTube Advertisers Spent 50 Percent More In 2012

By Megan O'Neill 

Yesterday during Google’s fourth-quarter earnings call, Nikesh Arora, Google’s Senior Vice President and Chief Business Officer, revealed that 2012 was a massively successful year for YouTube on multiple fronts.  Not only did viewers begin watching 4 billion hours of video a month, but Arora reported that “our top 25 advertisers are now spending average of over $150 million per year.”

Arora said, “YouTube is not only home for creators, but it’s also home for major brand advertisers.  On YouTube, our top 100 global advertisers spent over 50% more in 2012 than they did in 2011.  Clearly this is a strong signal of the power in YouTube to reach advertisers.”

Interestingly enough, Arora points out that one of the biggest factors in this growth has been the TrueView skippable ad format, through which advertisers only pay if viewers watch the ad.  Arora reported that 70% of in-stream ads on YouTube are now TrueView, with the skippable ad format recently expanding to Xbox, iPad and Wii in the last quarter.

Another factor, which was not mentioned in the earnings call but is another likely explanation for this massive growth in ad spend, is YouTube’s push of their premium content channels in 2012.  The company invested in a slew of professionally-created content channels last year, from celebrities to television and film studios and successful YouTube partners.  With premium content comes premium costs for advertising.

Of course, the fact that YouTubers are watching more video than ever – at over 4 billion hours a month – and that YouTube is “now available across over 400 million mobile devices, gaming consoles and connector PDs in addition to your desktop” also didn’t hurt.

And finally, because we can’t talk about YouTube in 2012 without giving a shoutout to Psy, Arora reported that Gangnam Style “generated over $8 million in all-in advertising deal.”  It is not clear exactly what percentage of this $8 million went to YouTube and which percentage went to Psy, but Chase Hoffberger of The Daily Dot reports that “it’s estimated that Psy will walk away with half of that $8 million,” though it may be less as an infographic in early December estimated that the Korean pop star had made somewhere in the vicinity of $900,000 from YouTube ad revenue.

Are you surprised by the numbers revealed in Google’s fourth-quarter earnings call? We’d love to hear your thoughts in the comments below.

Megan O’Neill is the resident web video expert here at Social Times.  Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.