We’re all familiar with YouTube: it’s the mega video-sharing platform that doubles as the second most popular search engine behind Google. That’s all well and good, but do you think you really know YouTube? Do you know the ins and outs of it? What makes it tick? Better yet, how does it make money? We often forget that even though we can’t see all that occurs behind the scenes, plenty does; more than we ever could imagine. Read on to discover how YouTube rakes in the cash, and why you should take a page out of their book, too.
Ads, Ads, Ads
The short answer is advertising. Paid advertising, to be more specific. Paid advertising is any kind of advertising that you have to pay for, versus owned or earned advertising. With paid advertising, marketers pay the owner of ad space in exchange for use of that space. The price paid for the ad space is often settled through a bidding process between marketers and the ad space owner.
Have you ever noticed videos at the top of the screen that has the word ‘sponsored’ underneath them? These sponsored videos are all a part of paid advertising. The advertiser pays YouTube based on the number of views it gets after such an ad has been clicked on.
This is a process known as SERP advertising. SERP, or Search Engine Results Pages, are the pages displayed by the search engines in response to a query by a searcher. The main component of the SERP is the listing of results that are returned by the search engine in response to a keyword query, although the pages may also contain other results such as advertisements.
Google Owns YouTube
Did you know that YouTube earns most of its revenue from advertisements and represents 11% of Google’s net US ad revenues? Google owns YouTube, after all. Google bought the site in November 2006 for $1.65 billion. Naturally, YouTube now operates as one of Google’s subsidiaries.
This brings us to our next point: Google ads. With all this talk about YouTube making money, we haven’t even discussed how its parent company does the same. The main way Google generates its revenue is through a pair of advertising services called Ads and AdSense.
With both Ads and AdSense, Google’s strategy is to provide advertisers with ad placements that are directly targeted to certain people. These Google users are the ones who are most likely to buy their products or services. This is a way of giving those users the most relevant information possible and hopefully encourages them to buy those products and services (if that’s what they’re searching for at that time).
Last, but certainly not least, this brings us to our final point: you. If you want your business to take off and make a lot of money, you have to incorporate ads into your business model. If you don’t, you can expect an unsuccessful business.
How Do Ads Benefit You?
It works for you in so many ways. When you remarket something to someone, it brings your business back into the forefront of their minds. They’re more likely to remember you if you keep coming back to them simply because it’s hard to forget a business that does that. If you’re then able to turn them into loyal customers, they’re more likely to tell their friends about their experience with you, thus bringing more people to your business.
When it comes to YouTube, this is a market on which you can’t afford to advertise. There are billions of people all over the world who use YouTube daily. Thanks to our ever-present digital society, most anyone can access it, meaning almost anyone can access your website online as well. This immediately expands your audience without you having to lift a finger. The same concept goes for Facebook: with billions of users worldwide, it’s so easy to advertise to them. When you do, you can guarantee people are going to remember you and your brand.
YouTube Ads Get Your Brand Noticed
The whole point is getting your brand out there in any way you can. The easiest way to do this is through advertising. Always have a strategy before you do anything so you can ensure a smooth and successful process. This goes for all of the marketing: a strategy takes you far, so not having one is one surefire way to, well, lose your way.
Take advantage of the platforms given to us. They’re free, they’re easy when it comes to targeting people, and it’s something you must-do if you want to continue to make money, just like YouTube.