One of the frequent complaints I hear about video-based traffic generation via YouTube is that conversion rates can be be in sub decimal range ( significantly less than 1%), but if you look at some of the leading lights on the network and how they’ve parlayed their popularity into opportunities (and new income), you might want to give YouTube a second look.

First the bad news. As interesting as your internet marketing technique or product is, most YouTube visitors will only be too happy to slap it down with a low rating because it’s disrupted their entertainment schedule. It might’ve been because you tagged your SEO video with “Miley Cyrus” or “Lady GaGa”. So tagging your video correctly is a function of getting qualified traffic, not just pure traffic numbers alone.

You’ve probably heard of some of the headliners at events like SxSW and BlogWorld such as Lisa Nova and iJustine, but unless you’re actively researching the tween/teen market, you might not be aware of some of the up-and-coming YouTube posters.

Savannah Outen

Oregon-based 16-year-old Savannah first started posting videos of herself singing in March 2007 and posts under the username Savannah7448.

Parlaying her online popularity of 122,000 channel subscribers and 3.6 million channel views, she’s released 3 singles with one of them “Goodbyes” climbing to #5 on the Radio Disney Chart.

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Esmee Denters

Having sung cover songs from the likes of Justin Timberlake, Natasha Beddingfield and One Republic, Esmee (from the Netherlands) is among the first artists to be signed to a record label after having been spotted on YouTube. (She’s the first artist signed to Justin Timberlake’s inprint Tennman in association with Interscope).

She currently has 197,000 channel subscribers and 14 million channel views.

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Although Oprah Winfrey’s had her Oprah YouTube channel since 1997, a recent actor parlaying her offline fame into online popularity is actress Jessica Alba, who’s also gone on talk shows to promote her husband’s business venture IBeatYou, which features online competitions.

Here’s her recent entry from a starting competition.

While video is still very much in its infancy, savvy marketers would do well to take note of this channel which has already replaced mainstream television as the main media channel, especially for the tween/teenage market (who’ll eventually become adults and bring their preferred source of media consumption with them).

Rather than go for the overt direct response marketing approach of asking for the sale, more subtle approaches such as providing quality content, building viewer loyalty and stickiness, might be just the ingredients for long-term business growth.