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YouTube: Ad Sales Hit 9% of Total Views

YouTube is selling ads against hundreds of millions of views each month, and in fact is selling ads against more videos than its nearest competitor - Fox Interactive Media - has total views, according to Shishir Mehrotra, YouTube’s director-product management.

According to AdAge, YouTube says it currently sells ads against about 9% of its video views in the U.S. That’s up from just 6% a year ago. Globally, those numbers are much lower. Still, YouTube is currently only making an estimated $120 (per Screen Digest) to $500 million (Jeffries & Co.), and even parent Google admits that the company has not yet realized significant benefits from the $1.65 billion acquisition.

The gain in ad revenue comes in part due to more content agreements, including, most recently, one with Disney. Mehrotra says YouTube does not necessarily need more studio film and TV content to make money, but industry speculation has it that, with such content deals, the site is hoping to alter web users’ perception that the site is nothing more than a hub for user-generated content. Mehrotra also says the company gets too much credit for deals with companies like Disney and not enough for its innovations like Content ID, which lets copyright holders place ads on videos.

One challenge in monetizing the site is that 70% of YouTube’s views come from outside the U.S., which is harder to sell to advertisers. Meanwhile, many of its content deals cover U.S. audiences only.

YouTube looks to jump 20% in advertising revenue in 2009, if a Credit Suisse report proves correct - but that will still result in a loss of $470 million because of huge costs accrued by the Google company.

Fox Interactive Media, parent of MySpace and IGN Entertainment, ranks No. 2 by comScore’s measure, at 463 million views in February, compared to YouTube’s 5.3 billion views in the U.S.