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The Evolution of YouTube

On May 2, YouTube made its first appearance at the annual TV upfront. The website has signed up celebrities including Amy Poehler, Rainn Wilson and Jay-Z, among others, to create channels of its own original programming to compete with traditional television.

According to a recent article in Bloomberg Businessweek, YouTube is “…funding filmmakers, artists, writers and proven online hitmakers with grants that range from a few hundred thousand to a few million dollars.” YouTube will invest $100 million total in this program. Starting in July, the website plans to have 25 hours of programming daily.

YouTube is changing its model to appeal to brand advertisers. In the past, the site focused on metrics like clicks and views, but now it focuses on measurements that show engagement, such as the number of minutes viewers watch videos. As part of its effort to increase engagement, YouTube has improved its recommendation engine.

In the May 14 AdAge article “YouTube’s Video Views Are Falling – By Design,” the publication notes that YouTube is changing the weight of the metrics the engine uses to suggest videos based on engagement:

“On March 15, YouTube altered its recommendation system to make the time spent with a video or channel a stronger indicator than a click in determining which videos to surface to a user.”

The article continues noting that YouTube is also testing at what point ads are shown to a user and also what happens after an ad is shown, such as a user leaving the site.

According to Businessweek, Toyota, AT&T and General Motors have planned to spend up to $10 million each on YouTube’s new channels. Quoted in Businessweek, Robert Kyncl, vice president and global head of content partnerships for YouTube, says that “if you are an advertiser trying to reach people, this is the right place to be.”

As iTunes changed the music industry, Amazon changed the publishing industry and Netflix changed the movie industry, television executives will need to respond to YouTube’s entry into their market.

As a full-service marketing communications agency, Domus helps its clients stay up-to-date on industry trends and consults its clients on business-building communications strategies.

Ed Samide is a Senior Account Manager at Domus, Inc., a marketing communications agency based in Philadelphia. For more information, visit http://www.domusinc.com. For new business inquiries, please contact CEO and founder of Domus, Inc. Betty Tuppeny at betty.tuppeny@domusinc.com or 215-772-2805.

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