Market Segmentation Examples -- YouTube

YouTube, the premier video site on the Internet, is facing a familiar problem encountered by wildly popular websites: how to monetize their popularity. According to contributing editor Fred Vogelstein of Wired magazine, the key breakthrough for YouTube, owned by Google, was to jettison the "one-size-fits-all" mindset that has driven Google's success.

Google runs on simplicity. The simple and elegant Google homepage emphasizes the purpose of the site and Google's value proposition: search for what you need, quickly sort through the results and find what you are looking for.

An a-ha moment at Google and for Shishir Mehrotra, Google's Director of Monetization working on a monetization strategy for YouTube, came with the revelation that YouTube visitors have different needs from Google visitors.

The team developed a market segmentation based on behavior, incorporating key factors such as the purpose of the visit (entertainment, watching TV, discovering new music, how-to, or education) and the length of time visitors have to devote to YouTube on a particular session.

Using data YouTube already owns on videos surfed, how much time is dedicated to each page by a particular user, the amount of time in any given session by each user and as well other metrics, the team segmented users by behavior and then developed approaches that advertisers could use to reach each segment.

YouTube has a short video explaining these basic approaches to potential advertisers

as well as

demographic information about YouTube visitors.

You can find the Wired article here. Scroll to The Business Model: It got creative with advertising.

Post-modern market segmentation at work!