YouTube’s rapidly expanding Promoted Videos feature has just registered its half-billionth hit, and shows no sign of slowing down.

                The Promoted Video program, which allows advertisers to pay a fee directly to the site to appear in search results, is definitely producing significant revenue for Google. Although it may not yet actually be turning a profit, the YouTube blog reports that they have logged a six-fold increase in viewers for these advertising oriented videos, which are created by the advertiser. Both the sense of being fun and funny within the advertising campaign, and the ability to tailor the video and specifically reach a targeted demographic have contributed to the continuing increase in both video creation and viewing.

                The feature had a major increase last year with the addition of AdSense ad units, a feature giving advertisers radically more control over the appearance of their ads. Promoted Videos are also now bundled with the Video Targeting Tool, and expanding into markets beyond the United States. In beta is the Promoted Videos API in AdWords, a new feature which allows web-design and advertising agencies and their clients to manage promotion video campaigns simultaneously with multiple clients.

                Reaching the half-billion milestone also addresses the issue of YouTube’s profitability. Despite the vast popularity and influence of the site, Credit Suisse’s revenue projections for 2009 were $240 million with an estimated $711 milllion outlay. This projection spells a $471 million loss for Google.

                But the megasite isn’t worried. In fact, YouTube’s own projections are for becoming profitable in 2010, according to CEO Eric Schmidt. And that’s not just YouTube talking. The site is now monetizing 2 billion views every week. That would represent solidly over 100 billion views per year, even if the site did not continue to grow and expand, an expansion which show no sign of slowing.  According to one Wall Street analyst, YouTube may generate up to $1 billion in annual revenue this year.

                Webmaster Studio sees the YouTube Promoted Video feature as a great asset for our client base, and looks forward to doing more creative work in this field. As the client only pays for the actual views, the Promoted Videos feature is a remarkably economic advertising tool.