Annotations as a tool to enhance activity within YouTube channels
"Just as the thumbnail can impact whether or not a viewer clicks to watch a particular video, annotations could quickly become just as important in driving (and keeping) video traffic."-Jeremy Scott, Editor-in-Chief, ReelSEO.com
YouTube annotations can be used for many purposes -- as an effective tool to attract subscribers, to increase activity within your YouTube channel, and to cross-promote and collaborate with fellow YouTube users. According to the YouTube Creator Playbook, the search algorithm within the site favors videos that drive traffic to other videos, channels, etc. that are linked through these annotations.
Here are a couple examples of how annotations can enhance user experience and improve channel activity.
Check out how MovieClips.com has paired with YouTube to create annotations that link viewers to clips and playlists within the channel:
See how YouTube user "Karmin" uses annotations to allow viewers to subscribe and link to other videos within the channel.