Posts for 'YouTube'

The following video was recorded at VideoNuze's Connected TV Advertising Brand Suitability Summit virtual on November 16, 2021.

Understanding Brand Suitability’s Relationship with CTV Advertising
What exactly is brand suitability and what does it has to do with CTV advertising? Why is it so critical for the CTV ecosystem? Who’s responsible? Why is brand suitability something that  all industry participants need to understand? How is the industry moving beyond conventional notions of brand safety?

- Joshua Lowcock - U.S. Chief Digital & Global Brand Safety Officer, UM
- Susan Schiekofer - Chief Digital Investment Officer, GroupM North America
- Dani Wolinsky - Global Head, YouTube Ads Buying Experiences, Google
- David George - CEO, Pixability (moderator)

Watch the session video now!

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.)

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Another quarter and yet another blowout performance by YouTube advertising. Alphabet reported Q3 2021 results yesterday, including YouTube advertising revenue of $7.2 billion, up 43% vs. Q3 2020. To say that YouTube has been on a roll over the past two years would likely qualify as a top 10 understatement by any reasonable person’s judgement.

Consider that the quarterly growth rate for YouTube advertising for each of the past 8 quarters has never been below 30%, except in the hardest Covid period, Q2 2020 when it grew 5.8% (keep in mind many other companies’ revenues shriveled in that quarter). The Q3 2021 growth rate of 43% follows Q2 2021 (up 84%), Q1 2021 (up 49%) and Q4 2020 (up 46%).

The growth streak is all the more noteworthy because YouTube advertising has been over $3.5 billion per quarter since Q4 2018 except Q1 2019 (reminder, Alphabet first began breaking out YouTube advertising in Q4 2019, and in that report it also revealed Q4 2018 revenue). To put YouTube advertising's dollar growth in perspective, in Q3 2019 it was $3.8 billion. In Q3 2021 just reported, it was $7.2 billion. That’s an additional $3.4 billion of revenue, or 89.5% higher. In other words, YouTube advertising is growing very fast off of a significant base.

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A new study released by Pixability and GARM (the Global Alliance for Responsible Media) has found that although 99% of YouTube campaign impressions are considered “brand safe,” approximately one-third of these impressions can still be unsuitable for particular advertisers. The new Advertising Insights Study, “What Every Agency Should Know About Brand Safety, Brand Suitability & Performance on YouTube” is based on 20,000+ YouTube campaigns that ran on YouTube in the first six months of 2021. DoubleVerify’s brand safety measurement provided further input to the study.

The study first seeks to distinguish between brand suitability and brand safety, as well their impact on campaign performance. GARM has developed a framework for identifying 11 topics that can be considered objectively harmful. On these dimensions, which align with YouTube’s own monetization policies, GARM reported in April, 2021 that YouTube is 99% safe for advertisers.

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“There’s something happening here,
But what it is ain’t exactly clear…”
-Buffalo Springfield, “For What It’s Worth,” 1967

Late yesterday, Alphabet released its Q2 ’21 earnings. Included was the single snippet of financial information for YouTube that Alphabet began reporting a couple of years ago: “YouTube ads,” which represents YouTube’s global advertising revenue (non-ad revenue such as YouTube TV and YouTube Music subscriptions, etc. are not included). YouTube’s ad revenue for Q2 ’21 was $7.002 billion, which was 84% higher than the $3.81 billion Covid-affected Q2 ’20 ad revenue, and 94% higher than the $3.60 billion pre-Covid Q2 ’19 ad revenue.

Yes, Covid dampened Q2 '20 ad revenue, as management had previously said. But still, you read those numbers right. An 84% year-over-year increase. On a very large prior number.

Consider a little comparative context for YouTube's $7 billion quarter: YouTube’s ad business alone is nearly the size of Netflix’s entire global subscription business, which generated $7.34 billion in revenue in Q2 ’21. But two years ago, Netflix’s Q2 ’19 revenue was $4.92 billion, which means over the past 2 years, Netflix has increased its second quarter revenue by $2.42 billion, or 49%.

YouTube has increased its ads revenue alone by nearly $3.4 billion, or 42% more than Netflix. Since Alphabet does not disclose YouTube’s specific expenses, it is impossible to calculate its profitability. But because virtually all of YouTube’s content comes from third party creators while Netflix’s annual content tab is approaching $20 billion, suffice it to say YouTube’s ad business is far more profitable than Netflix’s subscription business. It is also fair to project that in Q3 ’21 YouTube’s ad revenue will exceed Netflix’s subscription revenue.

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If you were one of the 14,000 attendees of last week’s NewFronts presentations, a central message that you couldn’t miss was that streaming has become an essential way for advertisers to reach 18-49 year olds. The coveted age group, which has long been the bread and butter for TV networks, is rapidly shifting its video consumption behaviors, and NewFronts presenters wanted ad buyers to know that they can either follow the eyeballs or risk losing access to this huge cohort.

Presenters expressed the message in different ways, but here are a few that caught my attention:

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Welcome to Inside the Stream, our weekly podcast with Colin Dixon of nScreenMedia where we take listeners inside the world of streaming video.

Earlier this week Alphabet reported its Q1 ’21 earnings, including $6 billion in advertising revenue at YouTube, a record for the first quarter. In this week’s podcast, Colin and I dig into what drove YouTube’s advertising, which was nearly twice the level of just two years ago in Q1 ’19 and also up 49% from Q1 ’20.

YouTube appears to be benefiting from two strong forces: the shift of ad spending from linear TV to CTV to reach younger audiences, and the desire by advertisers for more measurable, performance-oriented advertising, which YouTube has capitalized on with its TrueView for Action format.

We also spend a little time looking at the over-the-air market and how E.W. Scripps is positioning itself to benefit from the millions of households who still access TV this way.

Many thanks to our inaugural Inside the Stream sponsor Verizon Media. When you have quality connections at scale, you’re truly connected.

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YouTube, the juggernaut of online video, continued its hot growth streak, with advertising revenue in Q1 ’21 of just over $6 billion, up 49% from just over $4 billion in Q1 ’20 and nearly double the $3 billion YouTube reported in Q1 ’19. YouTube’s ad revenue accounted for 13.4% of Google’s total ad revenue of $44.7 billion in Q1 ’21, up from 12% of Google’s total ad revenue of in Q1 ’20. YouTube represents almost 11% of parent company Alphabet’s $55.3 billion in Q1 revenue.

As in Q4 ’20, on yesterday’s earnings call, company executives repeatedly highlighted two themes in YouTube’s ad growth: Brands shifting their spending to YouTube to gain incremental reach beyond linear TV, primarily to younger audiences, and Direct Response performance advertising that drives specific performance metrics. YouTube didn’t offer a breakdown between the two.

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Welcome to the first edition of the new Inside the Stream podcast with Colin Dixon of nScreenMedia. After many years of recording together, Colin and I decided it was time for a branding refresh. With Inside the Stream we intend to keep providing an insider’s perspective on the streaming video industry. We’re adding a feature at the beginning of the podcast noting a few important stories that hit our radar. We also intend to bring on more guests to the podcast.

This week we discuss YouTube’s dominance, underscored by Pew’s latest research, showing 81% of U.S. adults use YouTube. Then Colin shares an updated forecast for Disney+ and what it means to the larger Walt Disney company.

Many thanks to our inaugural Inside the Stream sponsor Verizon Media. When you have quality connections at scale, you’re truly connected.

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YouTube is used by 81% of U.S. adults, according to Pew Research Center’s new Social Media Use in 2021 survey. That’s up 8 percentage points from the 73% YouTube usage rate that Pew found in 2019. Among all the other social platforms Pew polled, only Reddit experienced a statistically significant increase in usage from 2019 to 2021, up from 11% to 18%. Facebook is the second-most popular, with 69% usage; all others are below 50%.

YouTube’s dominance over other social platforms spans gender, race, age, income, education and geography. Pew’s data highlights why YouTube has become so attractive to advertisers. For example, YouTube is used by 95% of 18-29 year-olds and 91% of 30-49 year-olds, compared to Facebook’s 70% and 77% respectively. It is used by 90% of those with incomes of $75,000 or higher, compared with Facebook’s 70%. And YouTube is used by 89% of college grads or above, vs. Facebook’s 70%. The only category where other social platforms come a reasonably close second to YouTube is among 18-49 year-olds where Instagram and Snapchat have 71% and 65% usage rates respectively.

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Advertising on YouTube and ad-supported video-on-demand (AVOD) services will grow from approximately $19 billion in 2021 to approximately $53 billion in 2025 in the U.S., a 29% compound annual growth rate, according to a new report from analysts MoffettNathanson. MN sees 67% of the 2025 spending, or approximately $35.5 billion, going to YouTube alone, with other AVOD providers splitting the remaining 33% or $17.5 billion, just about how spending is allocated currently.

MN characterizes the YouTube/AVOD ad spending as a new “mid-top layer” of the traditional marketing funnel, sitting below top-of-funnel brand advertising traditionally dominated by TV spending which MN forecasts will stay roughly flat by 2025 at around $70 billion. It sees total top-of-funnel spending declining from $108 billion in 2021 to around $99 billion in 2025. Below the YouTube/AVOD layer is middle-of-the-funnel digital/social media (except search) which will increase from an estimated $64 billion in 2021 to an estimated $137 billion in 2025, a 21% CAGR.

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More than 120 million U.S. viewers streamed YouTube or YouTube TV on a connected TV last December, according to a blog post yesterday from Neal Mohan, YouTube’s Chief Product Officer. That’s up from 100 million per month that YouTube last revealed in June, 2020 at its Brandcast presentation during the NewFronts. Mohan reiterated that while mobile is still the most popular way to consume YouTube content, CTV is the fastest-growing.

Mohan also said that in December over 25% of logged-in YouTube CTV viewers in the U.S. watched over 90% of their YouTube content on CTV.  Mohan quoted comScore data that 41% of all ad-supported streaming watch time occurs on YouTube, which makes YouTube by far the biggest CTV player.

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Last Thursday’s Q4 and 2020 earnings reports from The Trade Desk and Roku provide further evidence of connected TV advertising’s surge and also viewers’ significant adoption of streaming video. Because the two companies are heavily invested in connected TV advertising and provide lots of thoughtful insights on their earnings calls (transcripts here and here), their results and sentiments are valuable in gauging the state of the market. Together they provide a holistic picture of the market since The Trade Desk operates on the demand side and Roku on the supply side (primarily).

For some time, The Trade Desk has talked about the rising importance of CTV advertising on its overall business, which continued this quarter with the pandemic accelerating key trends. Founder and CEO Jeff Green said that advertisers’ CTV spending on the platform more than doubled in 2020 (total spend, including CTV, was $4.2 billion with Q4 revenue up 48% to $320 million). Green said “more than 1,000 brands spend at least $100,000 on CTV on our platform” and that “those brands spending more than $1 million on our platform in 2020 more than doubled from a year ago.”

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Last week Alphabet reported that YouTube's global ad revenues hit a record $6.9 billion in Q4 '20, up 47% from Q4 '19. For perspective on YouTube's and the market's growth, I interviewed Brian Atwood, who was just appointed Pixability's new Chief Revenue Officer. If you're not familiar with Pixability, it provides software and insights for video ad buyers to target and optimize their campaigns on YouTube, YouTube on connected TVs, Amazon Fire and Roku. It also just had a record year of growth and profitability.

VideoNuze: Congratulations on joining Pixability. What excited you about the company?

Brian Atwood: I’ve been working in the YouTube and Connected TV space for over four years now and I have always been impressed with Pixability’s unique targeting solutions, performance optimization and insights. I feel like there is no company better positioned to help brands and agencies navigate the big shifts we’re seeing in the market. More than anything, I’m looking forward to working with the people. They’ve assembled an outstanding team that is incredibly well respected in the industry.

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Welcome to the 547th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

A couple of weeks ago on our podcast, Colin and I discussed how both AVOD and SVOD services keep growing strongly. This week we explore two specific examples. In AVOD, YouTube’s ad revenue hit $6.9 billion in Q4 ’20, up 46% and for the full year ad revenue hit $19.8 billion, up 31% from 2019.

Meanwhile Crunchyroll, the anime OTT service, announced it’s up to 4 million subscribers, adding a million in the past 6 months, a record growth rate. Like many other streaming services, Crunchyroll appears to be benefiting from Covid. Colin and I explore what’s behind both companies’ success and where things go from here.

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YouTube advertising revenue grew to $6.9 billion in Q4 ’20, up 46% from $4.7 billion in Q4 ’19. YouTube’s results were reported as part of parent company Alphabet’s Q4 ’20 and full year 2020 earnings released yesterday. YouTube’s ad revenue accounted for 15% of Google’s total ad revenue of $46.2 billion in Q4 ’20, up from 12.4% of Google’s total ad revenue of n Q4 ’19.

Critical to YouTube’s ad growth is the macro trend of reduced linear TV viewing, especially among younger audiences. This makes it harder than ever for brands to reach these viewers, a tailwind that is helping all ad-supported streaming services.

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A new report from nScreenMedia and WildBrain Spark reveals that YouTube Kids is the most popular streaming video source for kids 12 years old or younger. Surveyed parents responded that 52% of their kids this age watch YouTube Kids, followed by PBS Kids (46%), Disney+ (24%) and YouTube (15%). Streaming services including Netflix, Hulu, Amazon Prime Video and Apple TV+ are all in single digits.

The survey data is included in the new report titled “Making Screen Time Family Time.” Two surveys were fielded, one in late October and one in early November, of U.S. adults who stream video on a weekly basis and have at least one child 12 years old or younger.  The first survey had 2,500 respondents and the second had 500 respondents. nScreenMedia’s chief analyst Colin Dixon is my weekly podcast partner.

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Yesterday YouTube TV raised its monthly rate by 30% from $50 to $65. It’s the fourth rate hike in just the past 2 years, as YouTube TV moved from its introductory rate of $35 to $40 to $50 to the new $65 per month. As recently as March, 2018 it was still possible to sign up for $35 per month and be grandfathered into that rate for a short period.

I’ve been a mostly satisfied YouTube TV subscriber since the early days, and of course, the rate increases have been painful to absorb. The fundamentals of YouTube TV as a pay-TV alternative that were appealing from day one have changed little - strong cross-platform access, unlimited DVR, 6 concurrent users, etc. What has changed is the growth in number of TV networks carried; indeed yesterday’s rate hike was tied to the launch of a group of ViacomCBS networks, just as the previous hike was tied to the addition of Discovery networks.

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As part of the IAB NewFronts, YouTube held its reimagined Brandcast virtual event today, emphasizing its TV viewership, incremental reach and originals as part of a broader pitch for ad buyers’ budgets. Brandcast attendees were able to customize their selection of videos by content genre and then learn from YouTube executives and talent about specific programming and monetization initiatives.

As it has done in the past, YouTube highlighted how the platform is used by viewers to create personalized experiences, helping advertisers better connect with passionate viewers on TVs. YouTube cited Comscore research that it had the largest ad-supported reach among cord-cutters and cord-never on connected TVs and the highest viewing hours among AVOD services. YouTube said it reached 77% of AVOD households in March and accounted for 41% of all AVOD watch time in March in the U.S. YouTube cited Nielsen research that it reached more 18-49 year-olds in March than all linear TV networks combined.

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YouTube launched “YouTube Select,” replacing and expanding its prior Google Preferred solution, which was a curated selection of top YouTube channels. In a blog post, Vishal Sharma, VP, Product Management for YouTube Ads said in a blog post that YouTube Select will also include “emerging lineups” which are “up and coming or niche channels” in categories like beauty and fashion, entertainment, technology, sport and other.

With the new program, YouTube is expanding the quantity of content it is curating and ensuring as brand safe, further targeting connected TV viewers. YouTube said it will give advertisers the option to “only serve ads on videos that have been machine classified and human-verified.” Brand safety is a critical consideration for traditional TV ad buyers who have been a target audience for Google Preferred.

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