Youtube Makes $1 Million A Year In Paid Clicks

Date : 2009/03/18 In - Tech Op-Ed - Tags :

In reply to this morning post on Silicon Alley about Youtube making $500 million in paid search revenue this year, I’ve made my little calculus on Youtube’s potential revenue based on facts instead of educated guesses.

I started running a paid search campaign on Youtube since the first day they launched this service, just to try out its potential.

I bought very generic keywords like shopping, shop, list, and so on for a video of Smartshopit.

Here is the report. I stopped this campaign about two weeks ago because I thought I had seen enough and didn’t feel like losing dimes for peanuts.

So the average CTR is 0.03% and the average CPC is $0.11. Let’s apply those numbers to Youtube total search queries and calculate Youtube’s potential yearly revenue on paid search.

Back in December, Youtube was retrieving SERPs for about 2.5 billion search queries. With an applied CTR of 0.03%, Youtube generated about 750,000 paid clicks. Now let’s multiply that by 0,11, and we get a mind-blowing $82,500 monthly revenue on paid search.

So on a yearly basis, Youtube generates $990,000 on paid search clicks, or let’s give them a million.

That’s quite different from the $500 million prediction, no doubt. This calculus is a gross approximation, but at best you can double or triple this output number if you want to give Youtube a chance.

Anyhoo, just saying that a lot of people’s been calling BS on the Youtube’s revenue predictions, but nobody bothered to show actual numbers. Now it’s done 🙂

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