The Rise of YouTube Marketing After Google's $1.65B Buyout
From three ex-PayPal employees' 2005 project to a $1.65 billion Google buyout: how YouTube became a real channel, proven out by Blendtec and Obama's campaign.
YouTube started in February 2005 as a side project by three former PayPal employees, Chad Hurley, Steve Chen and Jawed Karim, who reportedly built it because sharing video clips online was harder than it should have been. Eighteen months later, Google bought it for $1.65 billion in stock. That acquisition, closed in November 2006, is the moment most marketers point to as the start of taking online video seriously, but the more interesting story is what’s happened on the platform since.
The Partner Program opened the door
In 2007, YouTube began letting a select group of creators share in advertising revenue on their videos through its Partner Program. That single change turned YouTube from a place people posted clips for fun into a platform where producing video consistently could pay, and it pulled in a wave of more polished, more frequent content that a purely amateur platform never would have attracted on its own.
Blendtec proved a brand could just make good videos
In November 2006, Blendtec’s marketing head George Wright started filming company founder Tom Dickson blending things that had no business being blended, marbles, an iPhone box, golf balls, in a series called “Will It Blend?” It cost almost nothing to produce and had no traditional ad spend behind it, yet it built Blendtec more brand awareness than years of conventional advertising had. It became the reference case for a simple lesson: on YouTube, an entertaining idea executed cheaply can outperform a polished commercial with a real budget behind it.
A presidential campaign showed the reach
Barack Obama’s ongoing campaign has made YouTube central to how it communicates, posting speeches, ads and behind-the-scenes footage that reach far more people through free views and shares than the campaign’s paid television buys alone would. Whatever the outcome in November, the campaign has already demonstrated that a YouTube channel can function as a legitimate media outlet in its own right, not just a place to mirror content made for television.
What businesses are learning from all of it
A pattern has emerged from the accounts that are working on YouTube. It isn’t about production value; it’s about giving people something worth watching and sharing on its own merits, whether that’s useful, funny or surprising. Uploading a straight repurpose of a TV commercial rarely performs, while content built specifically for how people watch and share video online usually does.
Where this still has to go
Two things are still missing that will matter once they arrive: a reliable way to advertise around video at scale, and a way for smaller businesses without Blendtec’s creative instincts to figure out what works for them. Right now, succeeding on YouTube still depends heavily on having a good idea rather than a repeatable formula. That will likely change as more brands experiment and more data accumulates about what performs.
Three years after three guys with a shared frustration about sharing video started building a fix for it, YouTube has gone from a curiosity to a place where a blender demonstration can outperform a national ad campaign. The businesses paying attention now, rather than waiting for the channel to mature into something safer and more predictable, are the ones building the audience and the know-how while the opportunity is still wide open.
