Advertisers have always wanted to target the young given the importance of lifetime value and brand loyalty. Millennials and Generation Z are all now experiencing major life events which are bringing them into unfamiliar markets such as their first car, first mortgage or first child. Everything is new to these consumers who are shopping for cars and furniture for the first time on their own, making them a prime target for advertisers. Yet the challenge for the advertising industry is that these young viewers have vastly different viewing habits from their elders. Advertisers have to not only keep up with the sheer number of new platforms and streaming services on offer to reach these young consumers, but they also need to evaluate how advertising-friendly each of these platforms is.
There are currently four main methods to stream content via the internet or apps – also known as Over-The-Top (OTT) media. YouTube is the largest, with over 230 million users, with Netflix coming in close behind at 139 million viewers. Amazon claims to have 100 million users because of their Amazon Prime user base, though some experts believe that only about 43 million of them are actually utilizing the Prime Video service. Hulu comes in last place with 78 million users.
In addition to having the largest viewership, YouTube’s popularity with advertisers is down to the fact that the platform accepts advertising. For those advertisers dependent on using video to get through to their users, there is a real concern that with all the changes and new opportunities in the video environment, many of these options (such as Netflix and Amazon) have no or very limited commercial usage.
YouTube, however, primarily displays commercials in front of most videos, especially the higher-rated or most-viewed “brand safe” videos. Further, because YouTube is digitized, different audience segments can be targeted according to gender, age group, or even viewing time, meaning there is very limited waste in the advertising impressions. In addition, YouTube advertising includes the important option of a non-skippable ad.
Because YouTube provides that crucial ability to reach the 18 – 29 year-old category, advertisers have started to shift dollars away from network and cable television into these other areas more popular with the younger audience/
Brand new challenges
One issue that does pose a serious concern to advertisers is that of brand safety. Though there is no 100% brand-safe user-generated content, top influencers still need to be made aware of brand-safety guidelines so as not to antagonize any particular ethnic group or region. In addition, advertisers are continuously working with YouTube to ensure ads are not shown alongside what is considered as ’brand unsafe’ content. YouTube needs to remain vigilant over this, otherwise, advertisers will simply move on to other platforms.
Cutting the cord
The OTT services landscape is ever-shifting with new platforms being built on what seems like a daily basis, yet automatic success is not guaranteed. Nevertheless, with more consumers cutting the cord from cable, advertisers are challenged because there are fewer consumers accessing the abundance of commercial and ad-driven networks. In addition, because the new networks have fewer commercials, there is then less opportunity from an advertising standpoint.
As a result, advertising dollars are migrating from traditional television to online video and OTT services. YouTube currently has the upper hand in this battle, primarily due to the 100% focus on video content, as well as the fact it is the second-largest ‘search engine’ in the US. The likes of Facebook could perhaps one day pose a challenge due to its sheer number of daily users, though improvements to the video platform would have to take place before this becomes a likely scenario.
This call was hosted on July 23, 2019, under the title: “(YouTube) – Mega Advertiser’s Insight into Spend Amid Product Changes, Brand Safety Concerns & Adjustments.”
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