Commentary

Does TrueView's Success Mean No Difference Between UGC and Premium Content For Marketers?

While Mark Cuban is one of the nicer investors on Shark Tank, his online diatribes are lightning rods: readers in turn violently agree or disagree (that's sometimes a byproduct of their envy, and how they feel about this maverick).

Cuban is the entrepreneur's entrepreneur.  When Jack Welch (a career-long executive and one of the century's best corporate managers) published "Straight from the Gut," it could have been named after Cuban, who comes across as binary in his views: with him, it's a zero or a one, no middle ground (I guess you have to be, when time is the only precious commodity you have in the face of a million inbound opportunities).

Either way, Cuban's recent commentary on YouTube's success in building mobile views contained many accurate conclusions, even though how he reaches those conclusions raised some eyebrows.

For example, while YouTube's mobile views are growing, I think that has more to do with users spending more time on their mobile devices, rooted in YouTube's embedded app in iOS devices, and less with Cuban's assertion that YouTube has "trained [viewers] to understand that  there is no reason to watch YouTube video on any  device other than mobile." 

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It could be that YouTube's audience is watching a particular type of content where screen size matters less, but that isn't because YouTube conditioned the viewer -- it's the viewer that demonstrated that need, to which YouTube reacted.

While Cuban is too rich or successful to care about what anyone says, it's worth highlighting two statements in particular.

While YouTube viewers have indeed signaled that they are largely indifferent to the differences among UGC, pirated, prosumer, premium (made for web) or super-premium (made by Hollywood) videos, the following passage is worth diving into:

"[W]ith the amazing success of TrueView, [YouTube] could finally monetize all the junky user generated videos on mobile and the web. If someone watching a cat video chooses to watch an ad rather than skip it, [1] that’s a good thing for the advertiser no matter what the UGC video shows. [2] So they have far less need to generate more minutes.  With TrueView letting consumers skip the ad after a few not too intrusive seconds, they could not only serve ads around UGC, but they could learn what ads worked, on who and where. They didn’t need the big studios to generate more minutes for them. TrueView let them find higher margin minutes that were already in the YT ecosystem."

For starters, I am not sure if a Fortune 500 advertiser is any less discerning what content follows their ad simply because of TrueView (where they only pay for the ad if the ad is watched).  It's unclear if Cuban has data or a fact to back that claim. My guess it's straight from the gut, which is fine.

However, with regards to points 1 and 2:

YouTube's actions and marketers' behavior suggests that no matter how challenging it may be, YouTube will always both seek professional content and try to showcase it, for it will be the easiest way to boost eCPMs on the site, which would have a dramatic effect on YouTube's revenues.  Upping the eCPM (and fill rate) remain the two largest drivers of achieving greater revenue.  I believe that will remain a "perpetual" objective, not simply because of my seven years of experience in online video and on YouTube, but because of... well, mathematics.

Also, YouTube is at least really focused now on upping the minutes that users watch content.  Earlier this year, YouTube dropped its "monetizable views" metric in favor of "minutes watched" because advertisers are putting more and more emphasis on engagement and time spent on a given site.  The more time users spend watching content, the more ads they can serve within a visit. Lastly, Cuban's conclusion that"professionally generated content is pretty much doomed on YT" is also a tad incorrect, because music videos, for example, remain one of the most popular types of content. 

While you can question -- as Barry Blumberg, EVP of Alloy Digital and president of Smosh, does -- that short 3-5 minute videos, the core of YouTube's business, could ever be a huge source of revenue for producers, that doesn't make those two Cuban claims valid and a slam dunk.

2 comments about "Does TrueView's Success Mean No Difference Between UGC and Premium Content For Marketers?".
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  1. Paul Calento from TriVu Media, June 10, 2013 at 1:45 p.m.

    Short-form content doesn't necessarily mean UGC. Big question: What's more likely to drive broadcast-style outcomes off of a 15-sec. spot? Pre-roll against short-form content or ads within long-form? Here's my take: Short-form video is the new broadcast advertising.

  2. Walter Sabo from SABO media, June 10, 2013 at 3:37 p.m.

    Youtube has given stage to a group of stars they ignore: WebStars. People who make shows that only work online. They get BILLIONS of views. Because they are ignored they will migrate to a more appreciative stage. Watch.

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