Before I begin this post, perhaps it is necessary to explain the difference between YouTube branded versus partner channels. The key difference is the way Google makes money on them. Partner channels have a rev-share between Google and the content owner on advertising placed in and around the content. Only media companies and users with original and popular content are eligible to become part of YouTube’s partner program. Branded channels, on the other hand, are paid-for positions listed under the section sponsors.

Currently, brands can set up a branded channel (or brand channel, as Google calls it) on YouTube in return for a certain commitment in ad spend: in most European markets the minimum is 25k for a brand channel with default templates and 60k for a contest channel. This commitment means that the advertiser gets an identical budget in AdWords (YouTube + Google content network) or buys at rate card (YouTube only). Underlying links in the display ads are required to link back to the channel. For more detail, read my previous post on branded versus partner channels.

Monetizing YouTube

As we all know, Google is not making money on YouTube, yet. Although things are picking up, there is still much more room for improvement. Therefore, here is a list of suggestions that Google should seriously consider if they want to monetize YouTube:

Brand channels as a separate product

Although the current method of linking brand channels to ad spend is a way of driving traffic to the channel (and selling more ads on YouTube), brand owners do not pay directly for the pleasure of having a brand channel. Being on YouTube for users is like eating a bag of potatoe chips – you can’t just eat one. Given the right video content, there is a lot of value for brands and media owners in having that expanded ‘More from this channel’-box. Value they currently do not pay directly for. Just the ads that drive some traffic. So Google should start by placing value where it is generated – the content and the channel, not merely the required ads. I’ll bet YouTube can get more brands and media owners to commit a lower fixed annual fee (say 5-10k) than having to commit 25 or 60k in ad spend. Once a successful channel exists, brands and media owners tend to integrate it with multiple campaigns.

Brand channels as a conversion tool

Many brands and media owners ask me how much traffic a YouTube channel will generate. Either towards their own site or that of a trade marketing partner. Given the current choice between a partner and a brand channel, neither seems to be a perfect fit for these types of goals. Aside from a direct link inside the video description, there is no method of driving users directly from the video to a next stage in the  sales funnel. That is, from a brand channel. With partner channels, you can buy in-video advertising positions – but not exclusively. Brands want to entice audiences with a great branding message on YouTube first and subsequently persuade them to visit their site.

Example: a video that explains what you can do with your Blackberry, with an overlay ad to buy the phone in Vodafone’s e-shop. Other media owners want to use YouTube for generating views and – exclusively – drive traffic to a set of trade marketing partners. For example, a producer of fitness videos wants to direct traffic to sites of gyms.

Since Google does not place advertising around or on top of brand channel content, enabling these channel owners could generate additional revenue. Channel owners should be allowed to assign ads to specific videos (with DART), or allow a sub-set of specific AdWords users (i.e. their trade marketing partners) to bid on the videos. This way, YouTube becomes more than a way to generate views: a conversion tool.

Global branding, local marketing

Channel names are currently available on a ‘first come, first serve’-basis. Unless as a brand you have not paid attention, it is a good thing to sign up on YouTube with your brand name, even if you are not using it right away. Although Google seems to be respecting trademark laws, it is always better to be safe than lawyer-y. Provided that you have the channel (and signed up correctly, see point x) on YouTube, you cannot use a single channel for local marketing purposes. True, YouTube offers possibilities to put a geo-lock on content, thus making it impossible for users outside certain geographic locations to see both the channel and its videos (see image below).

YouTube Geo-block settings: click for large image

If you have a global brand, say Philips or T-Mobile, you cannot show audiences different versions of your channel and its content. Instead, brands have to come up with silly names for multiple channels, as was the case in the recent ‘Bravia in Motion’-campaign for Sony: aside from the illegible main English channel braviainmotion, Sony created local translations for France (braviainmotionfr), Germany (braviainmotionde), Poland (braviainmotionpo), Russia (braviainmotionru), Spain (braviainmotiones) and The Netherlands (braviainmotionnl). Not much branding going on here. Google could service brands like Sony better by showing people different designs and localised video content based their ‘gl’ and ‘hl’ settings. For example, Youtube.nl/braviainmotion re-directs to http://www.youtube.com/braviainmotion?gl=NL&hl=nl.

Enable name changes

As made clear from the example of braviainmotion, it is important to pay attention to how you register on YouTube. Once registered, you cannot change it. According to research from TubeMogul, properly used metadata form a major part of the success in video marketing. This includes the channel name. If the people behind braviainmotion would have paid attention, they would have registered as BraviaInMotion instead. This improves instant legibility and thus leads to better branding in YouTube search results. Since mistakes are only human, YouTube should allow those who made them to correct them – especially those who pay to have their brands featured on YouTube.

Choose your own thumbnails

With reference to the same ’secret’ formula from TubeMogul, thumbnails are a big thing in YouTube. By default, YouTube offers a set of three thumbnails. If you’re unlucky neither of them accurately describe what the video is about or they contain heavy movement. Even though their are ways to trick the system by editing in images at specific times in the video, paying customers should be allowed to upload a thumbnail of their own choosing. A number of partner channels are already allowed to do so, so this should be an easy change for YouTube to implement on brand channels.

External design hosting

Upon realising their channel for the first time, brand channel owners can choose to customize their channel with an animated gif as background image or choose from a default set of flash-enabled templates for more advanced channel features and design. For example the LG Channel (ExperienceLG) features a menu structure inside the video player, while T-Mobile’s Lifesforsharing channel includes even more interactive features.

Although the background image may be hosted on external sites, the set of interactive flash-templates are hosted on YouTube’s servers. This makes it difficult for channel owners to customize their brand channel based on current campaigns, unless they have to go through the trouble of setting up a new design with YouTube’s creative partners. Other social networks, such as Hyves, allow advertisers and their agencies to manage their own i-frames from external servers. They simply provide space (or canvas as they call it) to do your creative thing.

Allow special characters in channel names

Further to the point 4, legibility is indeed an issue. For a special category of brands this is even more true than others. For example T-Mobile, Coca-Cola, Mercedes-Benz, M&M’s, Gall & Gall and Johnson & Johnson. Now this is a tricky issue, since special characters are generally used for programming purposes. For example, YouTube uses ‘&’ and ‘+’ frequently inside their search queries. It is unclear whether this is true for the dash sign. Perhaps YouTube could allow for brand owners to register their channel name in a certain way – e.g. CocaCola, but have it presented in search results as being from Coca-Cola.

That’s all, folks. Hopefully someone at YouTube is reading this. By implementing some of these suggestions, Google will be able to lose less and less money on YouTube.

Although a user channel doesn’t feature all the good stuff, it doesn’t mean either that you should settle for bad design. The good news is dat HouseHoldHacker now offers a PhotoShop template document that enables you to quickly and precisely design your own background image. Only problem is that the file size is limited to 256kB. Below is the instructional video: