For years, Paul Eichen relied on specialty toy stores to sell his mechanical toys. In the aftermath of the financial crisis, when the shops started closing, Eichen had to find ways to directly market his toys.
He tried advertising on engineering and architectural websites to reach the parents of children likely to be interested in owning toy forklifts, trash trucks or bulldozers--to little avail.
After pouring thousands of dollars into banner ads, Eichen decided during the holiday season of 2010 to advertise his company, Rokenbok, on YouTube. Here he found success.
"Half our new customers now come from our efforts on YouTube," says Eichen. "Our efforts with YouTube have been the most successful experiment we've conducted since we've tried to convert ourselves into a direct marketing company."
Just why has YouTube worked for Rokenbok where other marketing efforts have failed? "We discovered that if we advertised where we might find children watching videos of mechanical things, that was a good way of targeting the audience we wanted to reach," he says.
Eichen says he would recommend the video website to marketers or small businesses looking to reach their target audience and drive sales on a budget. The good news for any potential converts: advertising on YouTube just got a little bit easier.
On Monday, Google--YouTube's owner--announced a new adword service for the video website. While small businesses could already buy search advertising on Google based on particular keywords, as of this week they can now buy keywords for video advertising through Google AdWords for Video.
In the past, Google required companies advertising on YouTube to spend a certain minimum amount of money, effectively shutting the service off from small retailers and other businesses. Now its video advertising has no minimum spending requirement and is open to anyone, says Baljeet Singh, a group product manager at YouTube, who wrote a blog post introducing Google AdWords For Video.
"All you need is a video and you can reach a global audience," he says.
The other big change is how businesses are charged. "We flipped the ad model on its head," says Singh.
Advertisers will only be charged if viewers watch their videos, giving them a tangible metric to evaluate return on investment. Additionally, marketers can now track what viewers do after they watch the ad, allowing them to tell if they go to the company's website or watch more ads from the brand, something they were able to do before with keyword advertising only on Google.
Those who have beta tested the new service, such as online fashion retailer, ModCloth, say it more easily facilitates targeted advertising, allows flexible formats at various costs and delivers solid bang for one's buck.
Theresa Rockovich, ModCloth's search engine marketing specialist, says ModCloth has gained new customers from its YouTube advertising at an "incredibly low cost per click."
The company repurposed much of the video content it had created for its blog, uploading do-it-yourself videos and tutorials, and overlaying these with advertisements that when clicked on take viewers to the ModCloth website. "If it's a video on how to make your own tights, the ad overlay in the video would send them to leggings and tights," explains Rockovich.
For marketers and small-business owners looking to leverage YouTube's new offering, she suggests keeping promotional videos under two or three minutes, and personalizing them with information about the employees or models hosting them. "It helps to add that context so the person has a personality within the message instead of being just a friendly face," says Rockovich, who has consumer tested several versions of the same video varied by messaging, length and treatment.
Toy company, Rokenbok, too, became a beta tester for Google AdWords for Video in September of last year, which gave the company its own brand channel, including the ability to link back to its website. Eichen recommends marketers creating promotional content for YouTube focus less on production quality and more on content. He uses YouTube analytics to track which videos do well; his results show that interesting stories with lower production value tend to retain attention better than perfectly shot and edited videos with less compelling storylines.
The company has come a long way from its first video in August 2009, featuring Eichen talking to viewers about Rokenbok's products. The first episode of its Go Team adventure series, uploaded in November of last year, involves an out of control robot trying to wreck the Rokenbok town carnival until it is stopped by the Go Team. It has close to 300,000 views.
"It's easy, fun and fast now that we've got it down," says Eichen. The company has tapped fresh out of college talent to write its scripts, while an 18-year-old German student who is visiting the U.S. shoots its video. Its sets are built in-house.
Particularly for companies whose target demographic is online, YouTube advertising can be a good way to reach new customers. ZAGG, a Salt Lake City-based company that makes iPhone protectors, has three different YouTube channels that have garnered about 35 million views. Derek M. Smith, the company's chief marketing officer, says even before YouTube allowed for ad overlays in promotional videos, ZAGG saw a steady stream of traffic from YouTube to its website.
YouTube's Singh suggests marketers who want to create video advertisements for YouTube work on telling a story, whether chronicling the product's history and its evolution, or just testimonials from customers about how the product has affected their lives.
Other types of promotional videos that work well, he says, involve educational content: advertisements that demonstrate how to use a product or point out interesting features such as those created by Bbqguys.com, one of the nine marketing ambassadors chosen by YouTube to share their video marketing strategies with other businesses.
There are also tutorials or how-to videos, such as those created by ModCloth, and by VeryPink, a website that sells knitting patterns. Both websites are Google marketing ambassadors.
Also, humor works as evinced by Orabrush, a tongue cleaner that was created by a Utah-based entrepreneur who began marketing his product on YouTube on the advice of a local college student and a $500 budget.
The Orabrush YouTube channel has a "vlog"--video blog--called Diary of a Dirty Tongue, which chronicles Morgan the dirty tongue, among other things, trying to relax on the toilet and by making a mess after he is demoted to janitor. The channel has close to 185,000 subscribers and Orabrush is now sold at Wal-Mart and CVS/pharmacy.
Marketing strategies must vary by company and product, says Singh, but it helps to keep the content engaging while staying relevant. What doesn't work: "When someone comes in and says I'm going to make a viral video, and they think there's a science for it."
YouTube has uploaded resources for marketers, including a YouTube for marketers page on Google+, a resource book on YouTube for advertisers, and a tool to create videos.