Why Does YouTube Have Ads? - dummies

By Rob Ciampa, Theresa Moore, John Carucci, Stan Muller, Adam Wescott

You might think that YouTube is a great listener, just because it takes a great interest in the kinds of videos you’re watching, but that’s not because YouTube has suddenly decided that you two are going to be Best Friends Forever. The truth is that YouTube’s product — the way it makes money — is not streaming video.

In fact, the streaming video part costs the company quite a bit of money because it’s expensive for it to host the GoPro videos you made of your dog’s bath.

So if YouTube isn’t making money hosting and serving videos, how is it making money? It’s always flattering when people listen to you and seem to be interested in knowing exactly who you are. Here’s the dirty secret: It’s making money selling advertisements! That means you are YouTube’s product. It’s selling your attention to advertisers, and that’s why YouTube wants so badly to know you. It wants to be able to tell its ad‐buying customers exactly who is watching their ads.

Though all this information may seem to be much like a dystopian police state, it turns out that it’s something that can work in your favor when you launch a channel with an eye toward making money from your content.