But the social network’s advertising revenue grew 18.4% during the quarter.
Fast-growing YouTube gains a starring role in online retailers' video marketing scripts.
When you're trying to attract new customers, you can't count on them finding you. You have to go where they're going online, says Jamie Grove, ThinkGeek's marketing chief, whose official title is director of evil schemes and nefarious plans.
That's why the online gadget retailer posts its annual April Fools' Day joke video on YouTube, the fourth most-trafficked web site in the United States, according to web tracking firm Alexa, in addition to on its own site.
Video is the natural way to lure consumers into the gag, Grove says. "Videos draw people in unlike anything else," he says. "They create a deeper connection." That's the reason consumers pass along viral videos, he says, more than viral photos or copy.
"Introducing the all-new, insanely great toy for a new generation of humans—the PlayMobil Apple Store," proclaims the video, which launched March 31. The tongue-in-cheek clip featured the launch of a plaything that married PlayMobil toy sets with the look and feel of an Apple Store complete with tabletop computers, iPads and iPhones. Optional was a long line of shoppers to place outside the miniature store, a wry comment on the hordes that gather whenever Apple Inc. releases a hot new product.
The video drew nearly a half a million views within a month, accomplishing its goal of drawing attention to ThinkGeek, including the notice of many online consumers who weren't already familiar with the gadget retailer. "YouTube brings people who don't know you to your site," says Grove.
The numbers bear that out. YouTube is third, behind only Google.com and Facebook.com in referral traffic to ThinkGeek.com, according to Alexa. That's why the retailer posts its on-site videos on YouTube, and why that content is an important part of ThinkGeek's overall marketing strategy, he says.
ThinkGeek, a unit of Geeknet Inc., isn't alone in leveraging the massive popularity of YouTube to attract web shoppers. 45 of the top 50 retailers in the Internet Retailer Top 500—the 500 largest North American retailers by web sales—have their own YouTube channels, according to a recent report, "State of Video in E-commerce" by SundaySky Ltd., a provider of technology and services for deploying and managing online videos.
And consumers are increasingly watching those retailers' videos. In the second half of 2010, the total number of views for the top 50 online retailers grew 120% from 168 million to 369 million. One reason for those millions of views: YouTube parent Google Inc. features retailers' YouTube videos prominently in natural search results on Google.com, making video an increasingly important part of e-retailers' search engine optimization strategies.
Even without the Google link, YouTube.com would be an attractive showcase for retailer videos. People watch more than 2 billion videos a day on the site—that's more than double the number of videos viewed less than two years ago.
YouTube is so popular that it accounts for the second-largest volume of web searches, behind only Google.com, according to web measurement firm comScore Inc. There were 3.71 million search queries on YouTube in March, 1.03 million more than on Yahoo.com and 2.11 million more than on Bing.com, the home page of the Microsoft Corp. search engine that also powers search on Yahoo's sites.
"People are searching for all kinds of things on YouTube," says Gordon Magee, Internet marketing and media manager at Drs. Foster & Smith. "Whether it is how to plant flowers or what the possible side effects of their pet's medications are, YouTube is where people turn when they want information."
To reach those consumers the pet supplies direct retailer posts videos from DrsFosterandSmith.com on YouTube.com. Drs. Foster & Smith, which is owned by veterinarians, considers its company's knowledge of pets to be the key factor distinguishing it from its competition. Videos are the ideal way to emphasize its three veterinarian staff members' authority, says Magee. By posting videos on YouTube, and not just on its own site, the retailer aims to help shoppers discover its brand by offering content relevant to consumers' interests.
For instance, during a heat wave last summer, Magee and his staff quickly put together questions about how to mitigate the effects of rising temperatures on dogs, then grabbed one of the retailer's three staff veterinarians to create an impromptu question-and-answer video that Magee posted within two hours of crafting the questions. The video features Magee posing questions to veterinarian Holly Nash. Nash dispenses tips ranging from giving a dog a cool, wet towel to lie on to checking to see if its body temperature rises above what's normal for the animal—a maximum of 103 degrees Fahrenheit. Ten months after the video posted it had garnered more than 750 views.
Although the video didn't produce a huge viral effect with thousands of views, it did provide valuable information to hundreds of consumers, says Magee. And some of the retailer's more than 200 other videos, such as "How to trim your dog's nails," have been viewed more than 50,000 times.
While only about 1% of the site's traffic clicks directly from YouTube to DrsFosterSmith.com, according to Alexa, Magee believes the efforts have a longer-term effect. "Our videos are a branding play," he says. "We want to share information and, while we're doing it, we want to subtly remind them who we are." Each of the retailer's videos open and close with a branded title screen, "Drs. Foster and Smith: The free shipping pet pharmacy" that also highlights the video's particular topic, such as the drug "Tramadol." A watermark also appears throughout the video, identifying Drs. Foster and Smith as the provider of the content.
There's also another benefit to YouTube videos, he says. "People are more inclined to send a YouTube link to their friends than a link from a commercial web site," he says. "YouTube gives us a more neutral positioning where people don't feel like we're trying to sell them something. We just want to offer good information and hope they trust us so that they'll buy from us later on."