In an effort to make its free video charing service into a money-making operation, the industry-darling online video company YouTube announced today that will begin placing video advertisements on its site alongside text and graphical advertising already appearing on the site. According to YouTube, the first video advertising client will be Warner Music Group, which will promote Paris Hilton’s (*cough*) music album on the site via the Paris Hilton Channel, which is sponsored by Fox Broadcasting (itself part of the Murdoch media empire which includes MySpace) to promote its television drama Prison Break.
By some estimates (HitWise, we’re looking at you), YouTube about a third of the U.S. online video audience are devotees of YouTube—although, to be sure, many of them are also devotees of Google Video and (especially) MySpace.
YouTube hopes to increase its advertising revenue through development of additional Brand Channels like the Paris Hilton Channel; channel contents are integrated into the YouTube user community (yeah, you think that ParisHilton account is really hers?). Advertisers will be able to customize the channels and encourage YouTube users to subscribe so they’re notified whenever new content is added. According to Reuters, YouTube also plans to roll out Participatory Video Ads, which users can choose play. Of course, they can also comment on the ads, rate, and share the ads, as well as embed the ads on their own Web pages.
