YouTube Allows Partners to Display Third-Party Ads

YouTube is announcing new ad options for marketers, moving along with its plan to generate a strong revenue stream. In a partnership with startup Free Wheel it will allow publishers to serve their own ads through their own networks, bypassing YouTube's established channels. This is a significant change for the video site as it has traditionally been very strict in allowing others to use its infrastructure and has been mostly reluctant in working with third-party companies.

“Today we're announcing a trial with FreeWheel that will allow some partners who sell their own ads to serve those ads directly into their videos on YouTube. (Previously, ads sold by these partners were still served by YouTube.) This will create a more centralized, streamlined process for partners in the test program, making it easier for them to sell ads and make even more money from their content,” Phil Farhi, YouTube product manager, wrote on the business YouTube blog.

The company has been experimenting with new ad formats and is running several test programs with in-video text ads and even video ads running either a short ad before the proper content or a longer one after it ends. However, so far, the site has been reluctant about third-party ads. In fact, it banned brand placement advertising in videos earlier this year after several publishers were bypassing YouTube and striking their own deals directly with the advertisers. YouTube promised then that it would launch its own brand placement platform and it has, in a way, with the new partnership.

YouTube's financial fortunes may be turning, with the site expected to make a profit sometime in the short future, according to Google execs. Its new-found confidence has also allowed it to defend its business and debunk some common misconceptions about the financial side of the site. And, while a few months ago the outlook from most research companies was especially bleak, even the analysts are starting to be a lot more optimistic about YouTube's future.