Youtube Has A Big Plan You Probably Don’t Know
Enter Youtube Connected TV and Youtube Select, It is going to further disrupt the current traditional advertising landscape
Hi, I’m Alex, the author of Creators Lab and a strategy consultant focusing on technology. Creators Lab sits at the intersection of social, commerce and media. We help educate people who are interested in learning more about the fundamental concepts and forces that are driving the creator economy.
On May 17, 2023, during Youtube’s Upfront Week event, Youtube announced that they are introducing 30-second non-skippable ads to Youtube Select, a premium-selected category of content produced by the top 5% of the creators on Youtube. What do 30-second non-skippable ads look like? Television ads.
In this article, we will dig through the advertising side of Youtube.
Today we will talk about
Youtube’s TV Streaming Invasive Growth
What is Youtube Select? Where is this heading to?
Permissions vs Interruptions
Youtube’s TV Streaming Invasive Growth
In Alphabet’s Q1 2023 earnings release, CEO of Youtube, Neal Mohan said that “in the coming years we're focused on, number one, Shorts; number two, engagement on CTV; number three, investing in our subscription offerings; and number four, a longer-term effort to make YouTube more shoppable.”
As you may wonder what is CTV? CTV means Connected TV when people access Youtube at home via a Smart TV.
In April 2023, Youtube overtook Netflix as the most streamed platform by time spent viewing. According to Nielsen, YouTube (8.1%), Netflix (6.9%), Hulu (3.3%), Amazon’s Prime Video (2.8%), Disney+ (1.8%), HBO Max (1.2%). However, the majority of the shares are occupied by broadcast TV networks (23.1%) and cable TV (31.5%). Also, over 50% of ad-supported streaming watch time happens on YouTube CTV for people ages 18 and up, which means Youtube is reaching over 150 million people through CTV. Youtube CTV is yet to be one of the largest drivers for Youtube adoption and profitability in the future.
Today an average American adult still spends roughly 3 hours watching TV. While Youtube dominates the mobile streaming market, the TV market is a significantly bigger one.
What is Youtube Select? Why does it matter?
Youtube Select is a curated list of premium content compiled by the top creators and Youtube would assert additional brand suitability controls to ensure advertiser brand alignment.
By running a single, longer-form ad, YouTube can align more closely with advertisers’ objectives while facilitating richer storytelling. The experience of watching MrBeast videos or sports at home will increasingly look like traditional TVs.
This is a big deal to traditional broadband and cable TV because when now Youtube is going to steal their share of the brand’s marketing budget. Because now brands can opt into Youtube Select using their traditional 30-second ad materials they made for broadband TV. It is also proven to be more effective.
Permission and Interruption
On Youtube, creators have no choice but to interrupt you. They create thumbnails and titles that have eye-catching colours, and hyperbolic scenarios to stop you in your scroll. They need videos to stick out from the rest because users are moving fast. They have to interrupt. However, for other content like Sports, RSS feeds, and TV shows, retentions are unparallel compared to Youtube videos because users have given permission to them to consume their content.
The monetize-ability of this content also correlates highly. The later you go in the spectrum, the more permission you have given to the platform to monetize your attention because the quality of the content is greater.
Youtube Select is enabled because, in the last few years, the quality and diversity of the content have all gone up. Youtube believes that people will watch through their Youtube Select content even with non-skippable 30-second ads like the traditional TVs do.
In the future, Youtube will establish more premium products such as Youtube TV, and Youtube Premium to monetize users who are willing to pay to access richer and more convenient ad-free experience, while Youtube will monetize free users with a correspondingly higher ad frequency through Youtube Select.
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Top Startups You Should Pay Attention To
Uppbeat (Series A)
Uppbeat is a royalty-free music search platform that operates on subscriptions. Founded in Jan 2021 by serial entrepreneurs Lewis Foster and Matt Russell, it has over 75,000 new users per month with 90%+ retention rates. Recently it launched its AI Playlist Generator feature, allowing users to create personalized tracks for their videos
Whop (Series A, Led by Insight Partners)
Whop is a digital goods discovery platform and marketplace. Founded in March 2021 by Schwartz, Zoub and Sharkey, Whop is a centralized platform for users to buy/sell digital goods varying from Reselling, Trading, Sports Picks, E-Commerce, Notion Templates, Gaming Goods, etc. Today it has over 3,000 sellers and has processed $100 million in transactions since its inception.
Brkaway (Pre-Seed, Precursor Ventures)
Brkaway is a communication/payment platform built for creators and brands. Founded in Jan 2021 by Bailey Rose King and Francis Ayling, Brkaway enables creators to share their media portfolio with brands, negotiate brand deals, and receive payments in within the same platform. Existing customers include KOHO Financial, Wattpad, Innisfree, Laneige, etc.