YouTube is ready to delegate the right to sell more ads to more video authors.
In January, Tom Leung, director of product management for YouTube, announced the plan. Specifically, this plan will allow video authors to independently select the advertising content inserted in front of the video content, and even sell ads directly to brands to negotiate their own prices.
At present, almost all YouTube ads are uniformly distributed by a set of algorithmic systems. This system will automatically recognize the interaction between video content and viewers, and then distribute the ads without human intervention. Compared to it, allowing video authors to choose their own advertising content is a more “intensive cultivation” approach.
In fact, as early as 10 years ago, YouTube started an attempt to “let authors sell their own ads.”
At that time, YouTube’s video advertising business was only launched, and the entire ad distribution system was very immature. So for those media organizations that already have advertising sales experience, such as NBC TV, YouTube launched a business called “partner-sold ads.” These mature media companies that have produced and distributed content on multiple platforms can directly port their advertising partnerships to YouTube.
Compared with algorithm-distributed ads, “self-operated” ads have three main advantages.
The first point is more precise audience matching. The algorithm mechanism may be able to recognize that the audience of a sports review channel is mainly adult men, and then push car advertisements to these viewers, but its understanding of users is still difficult to compare with the content creator himself. For example, bloggers on digital channels will know more about whether their fans are mainly iPhone or Samsung fans, they can make more matching choices when advertising, and advertisers often get better advertising results.
The second point is a more flexible bargaining mechanism. With better advertising results, advertisers will naturally be willing to invest more in advertising budget. YouTube ’s advertising system has a self-contained cost settlement method, but in general it is centered around CPM (average impact cost). YouTube ’s average CPM rate is currently around $ 18 per thousand ad views, which is not a high price for many top creators. If creators can reach more precise cooperation with advertisers, this price will increase exponentially.
The third point is to avoid market risks. YouTube does not allow all video content to access the advertising system. One of the important reasons is that a few extreme, controversial content may bring negative effects to advertisers. For example, in 2018, YouTube’s advertising system broke out and put more than 300 companies’ ads in front of some white extremism, conspiracy theories, and even suspected pedophile-related topics.
YouTube has since strengthened related ad review, but the related risks still cannot be completely circumvented by the algorithm system. Moreover, some content channels in question are not “unqualified to advertise”, but their content is different from the demands of most mainstream advertisers. If they are allowed to sell their own advertising, they may still find suitable advertising cooperation. For example, some guns or political content that is legal in the United States.
All in all, creators ’“ self-employed ”advertising is more like a“ intensive farming ”operation method, which is more detailed, more precise, lower risk, and can bring greater benefits.
So why did YouTube wait 10 years before starting to promote this approach?
Higher thresholds, more complex mechanisms
The biggest problem is the threshold.
Although YouTube ’s advertising distribution system puts forward a series of requirements for content, only channels with broadcast volume and subscriptions that meet certain criteria, and the content does not involve some extremely controversial topics, can apply to access the advertising system and earn revenue. But the truth is, this system has already made most of the video content on YouTube, including a large number of independent video creators.
These creators do not have the ability to sell ads themselves, and can only rely on YouTube’s advertising system to earn revenue. This approach may seem a bit “rough,” but it does give most creators the possibility to make money from videos.
But as YouTube grows and users grow, this is changing.
Many “Personal Channels” of that year have grown to tens of millions of subscriptions, attracting even more viewers than TV stations. For example, YouTuber PewDiePie, the most popular game on YouTube, has 103 million followers. Many of these people have registered their own companies or joined other media alliance companies to operate their YouTube channels in a more professional manner.
In fact, even if YouTube does n’t delegate the right to sell ads to video authors, they have already started their own “ad sales”. Most of the well-known YouTubers have tried to add some of their own business cooperation to the video, some of which will be inserted in the video content in the form of hard and wide, while others appear in the form of product, equipment sponsorship, prize sponsorship, etc.
For YouTube, the problem is becoming more and more complicated, because the business cooperation that creators talk about is embedded in the video content, and YouTube can not get a penny. The more mature this type of business cooperation mechanism, the stronger the media alliance of creators, the more hidden dangers YouTube will have for its own advertising business.
For the ads distributed by the algorithm system, the ratio of YouTube to creators is 45:55. With this 45%, YouTube has grown into one of the most profitable media platforms in the world. Google has just announced the results of YouTube’s business for the first time. In 2019, YouTube’s advertising sales revenue reached 15.15 billion U.S. dollars, accounting for 10% of Alphabet’s total revenue.
YouTube must make its advertising system more flexible, meet the growing needs of creators and advertisers, and ensure that it can continue to be the “dominant” of the game.