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YouTube plans to capitalize on its top streaming status

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Nielsen recently revealed that YouTube dominated streaming video viewing for 12 months, outpacing Netflix, Hulu and others when viewed on the big screen – the metric that matters to big brand advertisers.

YouTube is poised to capitalize as the big TV pre-sale season begins. Industry observers generally believe that YouTube is generating far less advertising revenue than it should because of its share of watch time.

The platform will make its case to advertisers at its annual Brandcast event on May 15 in New York. YouTube CEO Neal Mohan, Chief Business Officer Mary Ellen Coe and Google President Sean Downey will tout AI tools to help advertisers scale their ad campaigns and creators that appeal to broad audiences. They will be joined by top YouTubers including Zach King and Haley Kalil, as well as artists like Billie Eilish.

“I think everyone is quickly realizing that time spent is a more important metric than absolute reach,” said Brian Albert, managing director of US Video for Google/YouTube, in an interview with Business Insider. “If you run an ad-supported streaming platform but no one shows up to watch the platform, there are no advertising opportunities. We know our story has never been stronger than it is today, and we are very confident in our ability to help your customers achieve the results they want.


Brian Albert

Brian Albert.

Google



He could have been talking about Netflix, which is right behind YouTube in watch time, but whose new advertising tier is limited by its still low subscriber numbers. Or Amazon, which shook up advertisers by adding advertising to Prime Video but hasn't released data on how many people watch the ad-supported shows and movies and for how long.

According to Nielsen, other prestige streamers such as Disney+ and Peacock each barely achieve 2% of viewing time.

Why YouTube plays a big role in live sports

YouTube also reiterated its commitment to the industry's most sought-after content, live sports. YouTube has the NFL Sunday Ticket, which it promoted on Brandcast last year, and has been reported to be interested in the NBA broadcast rights, which are currently being negotiated.

Some analysts have questioned the math for Sunday Ticket, wondering how much YouTube wants to spend on rights given that most of its content funding comes from ad sharing, a model the company promotes for its ability to consistently deliver high-performing content produce, appreciate.

On YouTube, sports drive massive watch time and, in turn, fuel its advertising business through related content such as highlight clips and creator videos like that of major sports YouTuber Donald De La Haye, aka Deestroying, who appeared on Brandcast last year.

For example, YouTube pointed to its statistics showing that ads posted on YouTube during this year's Super Bowl received more than 90 million views. Hourly views on halftime performer Usher's official channel were more than five times higher than the previous Sunday.

“It's a different model, but we continue to explore a range of opportunities in the U.S. and around the world based on viewers' insatiable appetite for both grassroots sports and the shoulder content that supports them,” Albert said. “There are so many conversations about so many sports every day on YouTube. That’s why we want to whet our viewers’ appetite for more sports-related content.”

Amazon and Netflix are vying for attention


Kate Alessi, Google

Kate Alessi.

Tricia McCormack Photography



There is a lot of excitement to stand out from this year. Amazon is turning heads with plans for its first upfront offering. Netflix is ​​turning its first in-person pre-release event into an experiential event (the first in 2023 was virtual, avoiding a confrontation with striking Hollywood writers).

YouTube still faces outdated advertising buying structures, with some agencies still buying legacy TV and social videos separately. Some advertisers also still consider YouTube's user-generated content to be less prestigious and trustworthy than traditional Hollywood entertainment.

But YouTube is poised to grow its market share year over year, helped by the rise of audience-based buying and the blurring line between professionally and amateur-produced content, said Brian Wieser, a longtime advertising industry consultant who estimates YouTube is over-indulging in content only from Disney.

“Creators’ revenue share is real,” he said.

Kate Alessi, managing director of global product solutions at YouTube, said the platform was seeing interest in cross-media measurement based on conversations with advertisers and similar initiatives such as Britain's Project Origin, but acknowledged there were still headwinds.

“It’s part of the organizational structure,” she said. “Many agencies have now put together holistic video teams. Some have taken different approaches. Systems have been developed over decades to understand purchasing and measurement. It’s very complex to update and change them all.”