Big announcement from the weekend: YouTube (GOOG) will allow creators of videos to sell their own ads on the site, rather than accept whatever ads YouTube is able to sell.
In theory, this is a pretty big deal for video creators, and makes YouTube a much more attractive distributor for pro and semi-pro video producers. Sites like blip.tv and Viddler already allow creators to sell their own ads. But since this is YouTube, producers get a much bigger audience to sell, potentially allowing some to tap bigger brand advertisers than they otherwise might. YouTube takes 45% of the revenue, compared to a flat $5 per thousand on blip.tv.
A source tells us YouTube is requiring that do-it-yourselfers sell ads for at least a $15 CPM, which is what YouTube generally gets for the stuff it sells itself. That’s a lot less than the going rate for professional content — like CBS’s broadcast shows that it distributes on its Audience Network — which can be $25 or more. It’s also less than some niche Web video content targeted at verticals like mothers or car buyers. But it’s a lot more for Web content without a targeted niche. The popular AskANinja, for example, sells for a $12 to $13 CPM.
Also, YouTube is demanding that anyone participating commit to selling a minimum of $10,000 (paying Google no less than $4,500) per campaign, which comes to 666,667 impressions at a $15 CPM. Over time, that’s an easy hurdle for a lot of YouTube producers. But the key here is time. To put it in perspective, only four videos from YouTube’s partner program cleared that bar of 670k views over the past week, and this video was one of them (NOTE: possibly not safe for work environments). After a month, only 44 videos had accrued at least 670k views.
We also hear some YouTube producers are busy thinking of ways to game the system. Specifically, report a $15 CPM on a $25 CPM sale and pocket the difference. Want to read YouTube’s fine print? We have a copy of the contract below:
Business Insider Emails & Alerts
Site highlights each day to your inbox.