Next in Marketing: How to Treat YTD (YouTube Derangement Syndrome)
This week, Nielsen released its latest monthly report on streaming - The Gauge - which included an eye-popping stat:
Basically, YouTube is 10% of all TV viewing in the US.
Note, that doesn’t include YouTube TV. This is just plain old YouTube-watching on TV. And this isn’t 10% of streaming - it’s all TV.
That feels big - as evidenced by the reaction of many media industry observers:
Rich Greenfield, LightShed “YouTube is devouring CTV time spent.”
TV Grim Reaper: “The media is still just barely covering how much YouTube (classic, not YouTubeTV) is viewed on TVs in the US, and how fast it's gaining share. I'd wager YouTube viewing on TVs is close to that of the top 3 broadcast networks *combined*.
Mr. Grim Reaper went on to include more statistical context:
“Last comparable numbers I have are from July, 2023.
Total day avg. viewership:
YouTube 5.1 million
ABC 2.0m
CBS 1.9m
NBC 1.6m
To be sure, those numbers are total day. So we’re not saying that more people on watching YouTube than ABC during any given hour. Still, this data and its trajectory are pretty remarkable.
Also remarkable - the continued denialism in the media and ad communities about YouTube’s scale, and prominence in the eyes of many users.
I call this YouTube Derangement Syndrome.
You still get this a lot - YouTube isn’t ‘real TV.’ Or the idea that advertising only works well in highly-produced comedies and drama. Most of YouTube is either pirated from traditional TV - or it’s just dogs on skateboards.
The thing is, you can’t wish this trend away. When it comes to advertising in connected TV, you are basically looking at:
Netflix, which holds a dominant position in streaming, but barely has any ad inventory as of yet
Hulu, the ad-supported CTV pioneer, albeit one with limited scale
A bunch of traditional media companies trying to squeeze in ads into subscription business
Fast Channels, which are certainly growing, but have let’s say, debatable attention levels.
“It’s definitely under-bought,” said Michael Beach, Chief Executive Officer of the marketing and analytics firm Cross Screen Media. ““If you look at its TV share, it should at least be getting close to 10% of the TV market, but at best it’s maybe 4%.”
Beach said that for all of the big media agencies talk about being video centric, their structures are siloed, leading to conflicting definitions of what even constitutes ‘video.’ Plus, many buyers and sellers have missed the gradually professionalization of YouTube, despite creators such as Dude Perfect landing $100 million investments.
Beach recalled giving a presentation last year at the 4A’s during which he tried to argue that streaming ads from the top media companies and premium YouTube channels like Mr. Beast should be evaluated together on media plans. “It was a total dud,” he said. “I asked people about this concept, and no one raised their hands.”
“People still think its cat videos.”
Even digital teams struggle with where to put YouTube, Beach contended. He’s been struck by the growth of spending on Instagram Reels over YouTube, even though based on his company’s data, the attention paid to short form pales in comparison to YouTube on TV screens (yes, I realize YouTube has Google Shorts).
Interestingly, analyst Brian Wieser wrote this week that CTV ad spending is way out of proportion with time spent with ads. Except that the medium doesn’t appear under-bought- but rather oversold.
This is partially because of premium pricing due to high demand and fancy targeting. But mostly it’s because there isn’t enough inventory.
He has talked about the “the likely decline in available GRPs for all television in the United States with every passing year”
Maybe - but the more that YouTube grows, could it possibly offset that decline? YouTube doesn’t have the nightmarish ad load of basic cable, but I’d bet there are more ad avails than say Max or Peacock (though yes, many are skippable).
Whatever you think of YouTube, it’s growing steadily on TV, while the likes of heavy hitters such as Apple are struggling to eek out share., As Julia Alexander of Parrot Analytics noted on Twitter, “YouTube and Tubi's continued increase remains a concerning story for many streamers based on pure cost structures and engagement results.”
Indeed, Alexander makes a scary point for the rest of the media world. Most streamers - even those with strong subscriber numbers - struggle to get people to watch all that much. Which is why Disney+ is plotting a semi-Fast channel, according to The Information.
On YouTube, viewers aren’t the problem. It’s the perception of people that don’t watch YouTube that is.
Accenture recently put out a report on the media industry’s need to radically reinvent itself. The Town features a good interview with the report’s author.
Here’s a key report takeway:
“Highlighting a seismic shift in entertainment preferences, 59% of consumers regard user-generated content as equally entertaining as traditional media, signaling a competitive upheaval in the quest for audience attention.”
This might sound crazy, but instead of knocking platforms like YouTube as havens for UGC, do traditional media companies need a user-generated strategy? Amazon recently struck a deal to produce a show with Mr. Beast. You might ask, why didn’t CBS?
The Advertising White Whale
I wrote about my impatience with the ad world when it comes to video games a few weeks ago -and a reader - Amanda Rubin, EVP of brand solutions at Enthusiast Gaming- reached out to give her take on the state of affairs.
It was a such an interesting conversation that I invited Amanda on my podcast this week, during which she gave some refreshing real talk about what’s helping and holding back brands from ‘getting’ gaming.’
One vehicle that would seem to be ripe for advertising - and one that is certainly a threat to streaming and CTV ad time - is Epic Games’ Fortnite. Yet in direct contrast to Roblox, which is fully embracing ads, Rubin says don’t hold your breath
“From what I know to be true, I know that they're very anti -ad experiences,” she said. “They don't ever want pre -roll. They don't ever want intrinsic ads. So, you know, a billboard in a racing environment. They don't want anything that feels by default like an ad experience.”
That doesn’t mean brands can’t get at Fortnite’s huge audience. They just need to be willing to build custom experiences that enhance game play, and then make sure they promote them fully.
“They want [advertisers] to show up in a way that feels fun and authentic, enhances the gameplay,” she said. “It doesn't feel like ‘here's an ad.’”
