YouTube is debuting “call to action” overlays, which have some interesting applications for marketers and advertisers. This post dispels some confusion about this offering, and gives you tips to make stinkin’ amount of money on this functionality until everyone else catches up.

For some reason advertisers and marketers thought this functionality was already possible, but there were only two ways to create hyperlink overlays until now: a) a video owner could use an “annotation” to drive traffic to another YouTube page, or b) an advertiser could by Google Adsense cost-per-click or CPM ads (which appeared in the bottom 5th of video).

This new offering is really a “value-ad” to stimulate video owners to buy more of the undersold “promoted” videos, whereby the video owner pays YouTube a bid price (ranging from a penny to fifty cents) per click. Each time someone searches “prank,” I bid 1-5 cents per click. Like Google, it’s a low click-thru rate but I don’t pay unless they click. Chances are as a partner I’ll never make back the penny, but I’m experimenting to see how brands could benefit from this.

Again- here’s the criteria for this new offering, which is not being communicated well.

• First, you can’t use it if you’re a video owner or partner who isn’t buying cost-per-click ads to promote your own videos.
• Second, you can’t use this if you don’t own the video.
• You need to both OWN the video and be running pay-per-click ads to promote it.

Example- if you search “Nalts” on YouTube and you see my Garbage Can prank video, then you should see the text overlay ad (although it’s not working now, presumably because it’s being run through editorial approval). I’m not clear as to whether this prevents me from monitizing the video via InVideo ads or adsense ads.

TechCrunch reports this feature helped a charity raise $10K in one day. This could improve video’s ability to drive traffic, a primary objective for many advertisers. For instance, I spoke with a client in the travel industry yesterday that was not impressed with “impressions” and awareness, but on direct response. Could his digital advertising be linked to selling rooms?

Unfortunately, most campaigns have a very small click-thru rate (in my experience 2-3 percent is healthy). I worked on a recent promotion for a major network’s web property, and saw a healthy 6% rate (the percent of viewers that visited the destination site). But imagine if it was easier to find the link (instead of buried in the description tab, where the viewer must select “more” before even seeing the hyperlink.

So What, Nalts… How Do I make Stinking Amount of Money Using This?

Want to make some quick cash while the rest of the industry gets hip to this? This should work well temporarily because YouTube is the 2nd most-popular search engine after Google, and most advertisers aren’t exploiting it yet. You’re at a distinct advantage if you buy keywords on YouTube and have a video thumbnail (instead of a text ad) as a resulting ad, and you’re probably not facing the bid competition you might on Google for the same terms. So go forth and make money using these tips, and thank Uncle Nalts later.

1. Create a destination website packed with some relevant information related to a sought-after area (like electronics, lawsuits, mortgages), and soak it with Google Adsense advertisements that yield high pay-per-clicks.
2. Create videos about the topic, and encourage people to visit your website for important information. Keep the video SUPER short or you’ve lost ’em.
3. Post your videos, then bid on YouTube keywords  via YouTube ads so people find your videos. Tag them well so you hopefully get some organic views too.
4. Be sure your bid price is not more than you’ll make back (cap it at 1-5 cents and 5 bucks per day initially). If you spend 50 cents to get them on your video, and only migrate 10 percent, then you’ll need to make $5 per visitor to break even. But if you bid a nickel and migrate 20 percent, you have a decent margin as long as people click some of your Adsense ads.
5. Now your “target” will hopefully convert well in three phases:

• from a YouTube search to your video (at a low price)
• from your video to your own publisher website (hopefully 10-20% of them)
• from your website to the websites paying high cost-per-clicks to publishers (at a higher income to you than you paid YouTube).

Oh by the way- this isn’t sustainable. Eventually people will bid up the keyword prices on YouTube making the delta less significant. And in general it’s hard to justify paying for ads when your model is ad dependent.

More information:

• The YouTube blog visitors are not impressed. They’re still petitioning YouTube to keep the “old” channel pages (see comments).
• Check out the YouTube advertiser and partner “business” blog.
• But here’s where you go to start a campaign (YouTube ads).