With a little help from Paris Hilton, video-sharing site YouTube today announced the launch of two new advertising concepts that take cues from the site's own user-generated content.
"Hey, YouTubers, it's Paris," purrs socialite and aspiring pop-singer Paris Hilton in a new video that graces the right sidebar of the online video hub's front page.
The video is an example of what the company calls "participatory video ads," or PVAs. Like other YouTube videos, PVAs can be rated, commented upon, and embedded in blogs and MySpace profiles. The clip pushes Hilton's newly released debut album, "Paris," and is part of YouTube's initial big test of the online advertising waters.
YouTube CEO Chad Hurley said the first participatory video ad was for the Weinstein Co.'s current movie release, "Pulse." PVAs can also earn "most viewed," "most discussed" and "top favorite" status just like regular YouTube content.
The "Pulse" ad was viewed 900,000 times in four days, Hurley said. By comparison, all-time YouTube champ "Evolution of Dance"--a six-minute video from Judson Laipply, a motivational speaker from Cleveland--boasts 29 million views.
Hilton is also the star of You Tube's first "brand channel," the second concept in the company's new advertising plan.
Brand channels are much like the channels created for all YouTube users who upload their homemade videos to the site. But the purpose of a brand channel is to sell a product rather than to simply promote one's ability to attract an audience. This is similar to the sponsored MySpace pages that have become an integral part of the social networking site's advertising arsenal.
Despite its overwhelming popularity, YouTube hasn't been that profitable in its current form. The site has hosted some banner ads, promotions and sponsorships, but otherwise has been ad-free, a draw for many of its users.
But analysts say YouTube has to turn a profit to stay on top.
"Ultimately, they (YouTube) have to monetize the business," said Mike Goodman, an analyst with the Yankee Group.
Competing online video sites have begun offering profit-turning perks like sharing their advertising revenue with members. Others, like Google Video, have inked deals for sponsored content.
By using an advertising model that follows the form of its own user-generated content, YouTube hopes to come out on the better end of a sticky situation: It needs to advertise, but its audience is often "looking to avoid those ads in the first place" by choosing YouTube for video content," Goodman said.
"The video itself has to be the advertising, or the advertising has to be video," he added.
"It's not going to be for every advertiser," said David Card, vice president and research director at Jupiter Research. "Some advertisers aren't going to be comfortable near consumer-created content."
After all, snarky YouTube members can be a rather scathing bunch.
"Just a little rich girl with too much money and a lot of time on her hands," YouTube user "ptmchale" posted on the new PVA for Paris Hilton's album promotion. And a user "zzzyax" added, "What a loser...YouTube isn't for 'celebrities' as some people may call them."
But for the marketer who's willing to risk nasty comments and the unmentionable one-star "poor" rating in return for guaranteed, prominent exposure on one of the Internet's most popular sites, this could be an appealing new advertising option.
Or, as Paris Hilton would say, it's hot. Reuters contributed to this story.