YouTube’s novel “do-it-yourself” advertising model is finally showing signs of life, with the number of advertisers signed up increasing 10-fold in the past year. But in a cluttered forum where hundreds of hours of video are added each week, will the urge to go viral pay off for social-savvy companies?

Here’s how YouTube is capitalizing: it is making it easy to post an ad/commercial/marketing message to the site and then direct it to the most relevant users. On its advertising sub-page, YouTube is providing companies with tips how to embark on a successful ad campaign on the massive ad-sharing network. Just browse their tabs and you’ll be bombarded with clever examples how to capture the attention of an audience that, Google says, surpasses America’s Super Bowl, the most watched TV event in that country each year.

The appeal seems to be catching on because popular YouTube videos are full of in-video and content-specific side ads. For example, check out this YouTube video for an iPhone application review:

Notice the iPhone screen protector advertisement in the right-hand corner and the in-video ad for flyTAP.com, localized for me as I write this post from Rome. The video in this screen-shot was accessed in Italy, so not only are these ads content-specific but they are location-specific as well. The 96,320 views isn’t a small number either.

Here’s another one for a popular video game. With 54,401 views there is no doubt that the ad for “Splinter Cell” has been seen by gamers.

Google is going for heft here. Ads seem to be aimed at higher viewed videos (we didn’t find any videos under 1,000 views with an ad).

This could mean a lot financially. Online video advertising has risen 9% to $7.9 billion; compare that to search-based advertising which topped $11.4 billion, though rising at just under 6% per annum. If it continues to rise like that it just may pull YouTube out of the red. And considering the 13 billion Youtube views in March alone, it could start putting some green on advertiser’s balance sheet, too.