Google might have found a way to work around its YouTube problem: Offer more ways to advertise with video beyond YouTube.
Last year, YouTube became the poster child for social media abuse when the site was rocked by stories (such as this one) about businesses’ ads appearing alongside inappropriate content. Brands ranging from Amazon to Coca-Cola found their YouTube ads being placed next to user videos that espoused hatred and intolerance. The negative coverage laid bare two realities to advertisers:
- YouTube is a hotbed for extremist views, irresponsible content and disturbing behavior.
- The site doesn’t effectively moderate that content. Nor does it protect brands from having their ads appear alongside that content against the wishes of advertisers.
In the aftermath of mounting negative publicity, a number of businesses pulled their ads from YouTube. Google, YouTube’s parent, responded by pledging to do a better job policing YouTube, including hiring 10,000 people designated to moderate content. But controversies have continued to dog YouTube, including reports about ads for adult content appearing openly on the site.
Against this backdrop, Google recently unveiled outstream video ads. These ads are designed with the express purpose of giving businesses more video advertising options beyond YouTube. The ads appear in a variety of formats, including banners and interstitials, and they auto play on mobile devices without sound (users activate sound by tapping on the video).
Google makes no secret of the fact that part of the appeal of outstream video ads is to give its advertisers options besides YouTube. As Google wrote in its blog post introducing the option, “Over the past year, we’ve been working on a way to extend the reach of your video campaigns to people beyond YouTube, especially as they spend more and more time interacting with applications and sites on their mobile devices … Outstream ads drive incremental, cost-efficient and viewable reach beyond YouTube.”
The remark about people spending more time with apps and sites on their mobile devices is interesting given that YouTube is one of the most popular apps in the U.S. The problem isn’t that users are viewing more mobile content: The problem is with YouTube.
Not only is inappropriate content an issue, but typical YouTube ad formats such as pre-rolls and bumper ads are less appealing to users. According to analyst Mary Meeker, 62 percent of people are annoyed by pre-roll ads such as those appearing on YouTube.
Because Alphabet, the parent of both Google and YouTube, does not disclose YouTube’s ad revenues, we lack insight into how much the video site earns from advertising, although analysts have predicted 2018 revenues of $13 billion to $15 billion. We know with certainty that Google advertising is Alphabet’s cash cow, accounting for 86 percent of its total revenues in the first quarter of 2018.
Google needs to protect its revenue base, and yet even as recently as April, brands such as Under Armour were pulling their business from YouTube amid ongoing concerns about their advertising running alongside inappropriate content.
Realizing that YouTube is going to continue to wrestle with the problems that have been vexing the platform for months, Google is hedging its bets by providing businesses other options to get their content in front of users.
I recommend that advertisers:
- Press Google to address its content management problems. Social sites such as YouTube will always be messy places for brands to live. So long as YouTube is an open platform encouraging people to post their own content, the site will never be free of inappropriate content, and its moderators, however hard they try, are going to miss content they should have flagged. But YouTube, which has engineered one the most remarkable social platforms ever, should be pressed to engineer a better one.
- Explore newer formats such as outstream video ads, but manage your expectations. Judge outstream video ads as banner ads, not video ads. Outstream video ads will probably generate a better engagement rate than standard banner ads because video in general has better performance than flat display ads. But don’t expect engagement with the ad like you might get on YouTube—which, despite its problems, remains a popular app and search engine.
If your YouTube ads are delivering value, don’t let YouTube’s woes over user content stop you from advertising on it. Do expect better from YouTube. And explore life beyond YouTube to ensure that your content is not captive to any single platform.
Tim Colucci is a director at digital agency True Interactive.
