How Google is cashing in on YouTube stars' success
"We are just normal people and we're just filming our lives...I think that's what they (viewers) really love about our content, " says 24-year-old video blogger Zoe Sugg.
What is not so normal is that Zoella - Sugg's beauty 'vlogger' alias -- has over 6 million subscribers on YouTube, her own cosmetics line and book. At YouTube's Brandcast event in London Tuesday there was a line of screaming fans waiting to take a picture and hug her.
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"You just get a connection with them (the fans)," Zoella said during a speech at Brandcast.
Making the stars 'visible'
And Google (GOOGL)-owned YouTube is looking to capitalize heavily on the success of its talent.
The company has been spending heavily on billboards and adverts showing off their stars across the world and this is only set to continue.
"We're trying to get the message out there around the size and diversity and range of fantastic content that already exist on YouTube," Ben McOwen Wilson, YouTube's director of content partnerships for Europe, Middle East and Africa, told CNBC in an interview.
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"Lots of people know YouTube is big, but they don't know about brands like Zoella...and what we are trying to do with that marketing campaign is make those stars visible."
Book deals, make up lines
Zoella is not the only big hit on the online video platform which is seen as a stepping stone to other ventures. Her boyfriend, Alfie Deyes, who runs the PointlessBlog, released a book which reached number one in the Amazon Bestsellers' Chart. Beauty vlogger Tanya Burr has also released her own make up range.
And with viewer numbers in the millions, this means big bucks in terms of advertising revenues. So far this year YouTube's net advertising revenues stand at $3.24 billion, trumping last year's figure of $1.96 billion, according to eMarketer. This accounts for 7 percent of Google's net advertising revenue.
Changing perceptions
Wilson said the big advertising push is to attract companies to YouTube as a platform to promote and advertise their brand.
YouTube is looking to capitalize on the rising advertising spend on digital video which is set to grow almost 17 times faster than TV in the U.S., according to eMarketer.
The video streaming platform launched Google Preferred earlier this year in the U.S. which takes the top 5 percent of channels on YouTube broken down by genre such as food or beauty, and sells them to advertisers. A Google spokesperson says the offering is already sold out in America. The service was launched in the U.K. on Monday.
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"We are trying to change those perceptions and make it clear to people that there are fantastic brands that consumers of all ages are hugely engaged with on a daily basis and that you can now access those to buy media advertising," Wilson said.
Professional video
YouTube is continuing its push to professionalize the content on the platform. In 2012, the company opened a studio in Los Angeles that allows popular YouTubers to take advantage of camera and editing equipment as well as space to film.
On top of the studios in London and Tokyo, YouTube announced this week that it would be opening a space in Manhattan, New York. The hope is that the investment in higher quality videos will continue to broaden the appeal of YouTube as an advertising platform.
"Our platform is only ever successful when our creators' businesses are successful and that is what we are trying to do," Wilson said.
