YouTube has been around for a long time. But what is its connection with the traditional TV advertising market?
Perhaps, not enough.
Many tend to focus on the big five video streaming
services — Netflix, Hulu, Amazon Prime Video, Disney+and YouTube — which comprise 82% of all U.S. streaming video consumption, according to Comscore.
But just two of the five are
ad-supported. Overall, YouTube command 41% of all ad-supported digital video
advertising revenue.
More importantly, says Neil Mohan, Chief Product Officer of YouTube, in a blog: “Starting this year, advertisers in the U.S. will be able to measure their YouTube CTV
campaigns through a third-party provider, Nielsen.” And it's just in time for the upfront ad selling season.
So, will longtime TV brand advertisers that spend millions on upfront deals
with the TV networks look to move a bit more dollars to YouTube, the Google ad-supported video service?
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For sometime, under its Google Preferred marketplace, which had curated brand-safe,
high-value TV advertising inventory, advertisers have been doing that. The content had gleaned the top 5% of brand-friendly channels. But, as is the case in OTT/CTV land, ad inventory can be
limited.
The Google Preferred video market started in 2014 — before the pandemic, before today’s more accelerated live, linear TV advertising ratings declines. Google Preferred was
replaced by YouTube Select in May of last year.
Overall, Google says YouTube's ad revenue grew 36% in 2019 totaling $15 billion. (By contrast, eMarketer, projects Hulu gets to $3 billion.)
Of course, much of YouTube's ad revenue is user-generated, short-form stuff. But now, with ever more scattered premium TV and video impressions, is this the year major brand advertisers extend their efforts to include alternatives?
U.S. TV viewers/users have definitely made a
notable shift into the streaming space. But what is the breaking point when it comes to making sizable upfront commitments -- a la the legacy TV networks -- for new or relatively young digitally based
video platforms?