Friday, October 29, 2021, 1:57 PM ET|Posted by Will Richmond
Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.
In Q3 2021 YouTube advertising increased by 43% to $7.2 billion, extending to 7 out of the last 8 quarters that revenue has grown by 30%+. It’s an enviable track record and on this week’s podcast Colin and I dig into what’s driving the outsized performance.
In short, as I wrote earlier this week, YouTube advertising is succeeding by focusing on the lower part of the marketing funnel, where advertisers concentrate on driving user actions/conversions (e.g. purchase, subscription, etc.). The value of these actions/conversions can be modeled into an ROI formula, and once they’re proven in with high conviction, advertisers will spend more and more, because there’s essentially an unlimited ROI. This is what has driven Google’s and other digital businesses over the years.
But, as we discuss, the untargeted ads running all over Major League Baseball’s post-season games show that targeting and conversions are still a long way away in TV advertising. That means that despite YouTube’s massive growth, there is still huge opportunity ahead, for both it, and all players in the CTV advertising ecosystem.
(Note, I misspoke slightly when referring to TV ads I’ve seen in baseball’s post-season; I mentioned Chipotle, but it was actually Taco Bell whose ads I continue to be inundated with…showing how little attention I pay to them. My point about these ads being totally untargeted - since I’m uninterested in Mexican/fast food and there’s no data to suggest otherwise - remains.)
Listen to the podcast (30 minutes, 23 seconds)