YouTube has long been fighting for ad dollars. Recently, things are looking just a tad rosier. They’ve got the new Universal Music deal. The site also says it currently sells ads against about 9% of its video views in the U.S up from just 6% a year ago. Nice, but whatever. Credit Suisse is guessing that the site’s total losses will hit $470 million. YouTube is still not doing its part for Google’s revenue structure despite its massive popularity.
So, how is it that the video site can turn down ad deals? That’s right. YouTube has been turning down deals from media buyers that use CPA – cost per action. When publishers sell media on a CPM basis, it’s a finite game. They know precisely how many page views are required to fulfill their end of the deal. With CPA, they don’t have a clue how long it could take to hit their goal. If your site is fighting off advertisers with a stick, then perhaps, CPA might not be the best thing for you. However, YouTube is not beating off anyone. The site has some trouble when it comes to selling ads for many reasons. One being that 70% of traffic comes from outside the U.S.
However, media firms are being told that YouTube “wants” to take such deals, but “can’t.” Now, why would that be? Is it that they are just determined to only make content deals like the one recently inked with Disney? Consider that YouTube recently lost such a possible deal with the Discovery Channel to Microsoft. They can’t and won’t win them all – and there’s only so many deals like that to go around.
If Bernie Madoff taught us anything, it’s that diversification is key. It’s hard to believe that Google, a company that is considered to be a champion of invention, evolution and revenue, is also a company that is stuck in the mud.
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