YouTube Rebounds with Connected TV Ad Spend

YouTube Rebounds with Connected TV Ad Spend

YouTube

The conversation about connected TV (CTV) advertising often focuses on the major streaming platforms such as Hulu and Netflix. But YouTube belongs in that conversation, too. YouTube has seen a remarkable surge in CTV ad spend for the most recent quarter, surpassing its competitors. As reported in Insider Intelligence, while YouTube experienced a 31 percent increase in CTV spending, streaming services like Max and Netflix only saw a growth of 6 percent.

In addition, the quarter marked the first time since Q4 2021 that platforms such as YouTube, Google Search, Amazon, Instagram, and Facebook all witnessed spending increases.

The CTV sector has seen a boom due to a rise in cord-cutting and increased time spent on these platforms. Consequently, it has become one of the strongest areas for ad spending in 2023. Presently, CTV spending in the United States amounts to $25.09 billion, while traditional TV spending remains higher at $61.31 billion. But by 2027, this gap is expected to close, with CTV spending projected to reach $40.90 billion and TV spending forecasted at $56.83 billion.

The transition to CTV may gain momentum soon, as industry giants like Disney contemplate selling off some TV assets to focus more on digital video. Such moves from major advertisers could attract more investment into the digital video space.

YouTube stands as a frontrunner in the digital pivot, owing to its TV viewership and content model, which gives it an edge over streaming services and other CTV platforms entering the market. The platform has seen a steady increase in viewership on TV screens, with users spending 15 minutes on CTVs, matching the time spent on mobile viewing. YouTube has capitalized on this growth by incorporating user-friendly features and introducing Shorts to TV screens.

In addition, the ongoing Hollywood writers and actors strikes position YouTube to attract more ad revenue. Competitors will have limited new content to entice advertisers, whereas YouTube’s user-generated content model remains unaffected, even weakening arguments against treating such content as “premium.”

According to forecasts, YouTube is expected to secure $2.89 billion in U.S. CTV ad spending this year, second only to Hulu, which Disney is actively seeking full ownership of.

The rise of CTV ad spend is a welcome development for YouTube, owned by Google (which, in turned, is owned by Alphabet). YouTube’s ad business had posted losses for three consecutive quarters (an unprecedented downturn following years of double-digit gains) before experiencing a rebound in the most recent quarter.

In a call with investors, Alphabet CEO Sundar Pichai said, “The Living Room remained our fastest growing screen in 2022 in terms of watchtime. We’re reaching more than 150 million people on Connected TV screens in the US, and seeing growth and momentum internationally. And on subscriptions, there’s good growth. Late last year, we announced over 80 million YouTube Music and Premium subscribers.  Signups for NFL Sunday Ticket kicked off in April, and we look forward to hosting our first football season on YouTube this fall.”

Advertisers should watch closely emerging ad formats that YouTube is rolling out specifically for CTV. For instance, non-skippable ads are coming soon to YouTube Select on connected TV. This means that viewers will see one 30-second ad instead of two consecutive 15-second ads. YouTube is also bringing new Pause experiences to CTV, so that advertisers can drive awareness or action by owning that unique interactive moment when people pause a video. Learn more about these developments on YouTube’s blog.

At True Interactive, we partner with our clients to manage CTV campaigns that deliver ROI. We work with all the major platforms, including YouTube. Learn more about our CTV work on our website and contact us to discuss how we can help you.

Google Launches New Video Campaign Types

Google Launches New Video Campaign Types

Google YouTube

Nine out of 10 marketers use video as a marketing tool – an all-time high, according to HubSpot. Ninety six percent of marketers  — more than at any point in the past nine years — told HubSpot they see video as an “important part” of their marketing strategy. So it’s no surprise that Google continues to roll out new tools to help marketers capitalize on video advertising.

At Google’s May 23 Marketing Live event, the company launched new ad products intended to capitalize on video:

Video View Campaigns

The main goal of Video View Campaigns is to drive as many views as possible at the lowest cost per view (CPV). Google suggests that these campaigns can potentially increase views by an estimated 40 percent in comparison to the conventional skippable in-stream cost-per-view campaigns. This is achieved by integrating different ad formats, including skippable in-stream ads, in-feed ads, and Shorts ads, and letting Google-powered AI dynamically optimize where the ads are served. This new campaign type sounds ideal for advertisers looking to maximize views by running different ad formats (on different YouTube placements) under a single campaign, instead of splitting creatives by ad format into multiple campaigns. The global launch of the Video Views Campaigns beta is scheduled for the coming month. Ultimately, Google hopes to offer advertisers a broader range of alternatives for connecting with their target audience.

Demand Generation Campaigns

Demand Generation Campaigns are crafted to use AI to engage consumers and motivate them to take action. These campaigns will run on different platforms, such as YouTube Shorts, YouTube in-stream, YouTube in-feed, Discover, and Gmail placements. In contrast to the prior lead form ads, the call to action for these campaigns will direct users to the advertiser’s website, which (says Google) should facilitate simpler conversion tracking.

A noteworthy aspect of Demand Generation Campaigns is the development of lookalike segments based on seed lists. These lists may include first-party data and YouTube users, enabling enhanced targeting through the implementation of lookalike segment settings: narrow (2.5 percent reach), balanced (5 percent reach), and broad (10 percent reach). Ad creatives can be specifically designed for these lookalike segments – which, in theory, should improve the chances that the ads resonate with target audiences.

The development of lookalike segments based on seed lists is a departure from Google’s recent announcement regarding the phaseout of Similar Audiences. When Google first announced the sunsetting of Similar Audiences back in November 2022, Google mentioned that “similar audiences will be transitioned to more durable solutions.” At the time, it appeared as though Google was referring to audience expansion and optimized targeting, which are simple toggles an advertiser can enable or disable for any given audience to have Google find more users that either look like an advertiser’s target segments or are likely to convert. That said, it’s possible that Google is restricting the capabilities of Similar Audiences as we know them by removing them from an advertiser’s view, and reintroducing a more restricted version of these calling them Lookalike Audiences just as we are seeing for Demand Generation Campaigns.

While we were able to create Similar Audiences off rule-based segments such as visitors of “/shop/collections/jackets,” the new Lookalike Audiences seem to only allow the use of first-party or YouTube audiences for their creation. I am curious to see if Google makes Lookalike Audiences available for other campaign types in the near future, or if it still limits their use to Demand Generation video campaigns.

What Advertisers Should Do

We urge advertisers to take an even-handed, critical approach with these new products. Google plays up benefits, but with the benefits come some caveats. As I blogged recently, Google’s ad products have lately been launching without giving advertisers adequate control and visibility into performance so we can clearly see what is working and what is not and adjust our strategy accordingly. This is not to say Google is releasing bad products – but they should provide more visibility and control rather than take a “Just trust Google – we know what we are doing” stance.

At True Interactive, we advocate on behalf of our clients. We are monitoring these developments closely. Contact us to learn how we can help you succeed in all forms of digital advertising.

Image source: https://unsplash.com/photos/8LfE0Lywyak

 

Three Takeaways from the YouTube/NFL Streaming Deal

Three Takeaways from the YouTube/NFL Streaming Deal

YouTube

While all eyes were on Amazon’s streaming deal to broadcast NFL Thursday Night Football, YouTube waltzed in and pulled off an upset. YouTube signed a seven-year deal worth an average price of $2 billion a year to secure rights to the NFL Sunday Ticket franchise.

This is a big move for YouTube. Sunday Ticket is a subscription-only package that allows customers access to all Sunday afternoon games for out-of-market teams. DirecTV currently pays the NFL an average fee of $1.5 billion per season for both residential and commercial rights. Its deal expires after the current season.

Sunday games represent peak prime football. NFL Thursday Night Football (TNF), by contrast, typically features subpar games largely because the Thursday timing does not give teams enough time to prepare after their previous Sunday games. Amazon’s ratings for TNF broadcasts have been spotty although four games rank among the Top 100 most viewed telecasts of 2022 according to Nielsen.

YouTube reportedly bested Amazon, Apple, and ESPN to secure the rights. YouTube will offer Sunday Ticket as an add-on to YouTube TV (a subscription streaming service that lets you watch live TV from major broadcast and popular cable networks) and in the video platform’s main app through a service called Primetime Channels that allows viewers to subscribe to individual channels.

Here are some takeaways from the agreement:

  • The deal is another sign that connected TV (CTV) is the future. For the first time, streaming viewership topped cable in 2022, and this trend is not going to reverse course as cord cutting continues. As reported in Axios recently, traditional television companies and major media firms are bracing for further declines in the ad market and yet another increase in cord-cutting this year. “The migration of the country’s biggest sports rights packages from linear TV networks to streaming will expedite the inevitable collapse of the cable bundle,” Axios noted. At True Interactive, we believe it’s important that businesses understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated. Connected advertising is similar to linear TV advertising because both formats rely obviously on video. But connected TV is different in many important ways. For one thing, advertisers need to understand how to create video content that will reach viewers across a variety of viewing devices in addition to TV screens, and connected TV ads are competing with multiple content streams. You can watch Amazon’s TNF on a laptop, mobile phone, or gaming console with multiple screens open. The same will hold true for watching NFL Sunday Ticket via YouTube TV. YouTube offers a number of connected TV ad units including its Masthead ad format. YouTube has added more CTV formats recently and will certainly offer more as its competitors such as Amazon do the same.

  • This a victory for first-party data, which is the information that businesses collect directly from their customers. YouTube will use first-party data to sell targeted ads to help drive revenue for the games. Right now, third-party audience data is withering away thanks to Apple’s and Google’s privacy measures. Businesses that figure out how to monetize first-party data enjoy an enormous advantage. YouTube is the second-most popular search platform in the world (behind Google). The company will be well positioned to us first-party data to sell targeted ads to NFL viewers.

The 2023-24 NFL season seems a long way off. YouTube still needs to deliver on investor expectations for parent company Alphabet between now and then. Look for YouTube to expand even more into the lucrative live sports field, which is still up for grabs among streaming platforms. Meanwhile, Alphabet’s next earnings announcement is February 7, 2023. Let’s see how YouTube’s advertising revenue delivers.

Contact True Interactive

True Interactive can help you navigate the connected TV landscape. Our services range from media strategy and planning to automated performance reporting. Learn more about our services here, and contact us to learn more.

Why YouTube Is Turning to Shorts for Social Commerce

Why YouTube Is Turning to Shorts for Social Commerce

YouTube

Short-form video is an important battleground for brands and consumers right now. TikTok really changed the game for video content creation by inspiring millions of people to create TikTok videos that typically last anywhere from 10 seconds to 60 seconds. Since then, a host of imitators have appeared, including Meta’s Reels on Facebook and Instagram; and YouTube Shorts.

Many businesses have quickly cracked the code for creating short-form video, and everyday users continue to up the ante, too, which has accelerated the rise of the creator economy, or everyday creators who monetize their content with the help of the host app.

Short-form video is also rapidly evolving as a format for creating ads, free content, and shoppable experiences. The latest example: YouTube Shorts is expanding shopping features.

What Is YouTube Shorts?

Shorts is a feature available to YouTube users. With Shorts, people can quickly and easily create short videos of up to 15 seconds, similar to how TikTok and Instagram Reels are used. The videos are created on mobile devices and viewed, in portrait orientation, on mobile devices. And once a person opens one Short, they get access to tons more of them (again, think TikTok or Reels playing one after another.) According to Google, YouTube Shorts now averages over 30 billion daily views (four times as many as a year ago).

It did not take long for businesses to get involved with Shorts. As we have blogged, brands everywhere are connecting with the vast YouTube audience with organic content and advertising.

For instance, Kitchen and home marketplace Food52 is posting Shorts that offer sneak peeks at its longer-form content on the traditional version of YouTube, as well as repurposing some recipe videos. Drupely’s olive-oil brand Graza says it is creating user engagement by posting how-to cooking and recipe content. According to Graza, videos focused solely on Graza products do better on TikTok than on Shorts.

Social Commerce on Shorts

If YouTube has its way, more brands will be using Shorts to sell things to people. New shopping features are being tested by YouTube in order to accelerate social commerce on YouTube. The new shopping features allow users to purchase products as they scroll through Shorts.

In the United States, eligible creators can tag products from their own stores. Viewers in the United States, India, Brazil, Canada and Australia can see the tags and shop through the Shorts. (The plan is to expand tagging for more creators and countries.)

YouTube is also experimenting with an affiliate program in the United States. This makes it possible for creators to earn commissions through purchases of recommended products in their Shorts and regular videos. YouTube says that this test is in early days. The program will be expanded in 2023.

This is just the latest in many efforts by YouTube to inject social shopping into the user experience. For instance, YouTube launched shoppable ads and the ability to shop directly from livestreams hosted by creators. YouTube has good reason to make it easier to buy and sell products on Shorts. Shorts has topped 1.5 billion monthly users. According to gen.video, YouTube ranks third overall in terms of where consumers do their product research before buying, only behind Amazon and Google directly.

YouTube Shorts is in a race with Instagram and TikTok to win attention from shoppers. Both apps have a head start on Shorts, and TikTok is testing TikTok Shop in the United States. TikTok Shop allows users to buy products directly through the app. All of them are trying to get a slice of the social shopping pie: social commerce is expected to be a $2 trillion market by 2025.

Brands are already figuring out how to sell products via Shorts. Glossier sold products through Shorts in June by creating a challenge for users to try. Glossier gave about a hundred influencers a new pencil eyeliner and encouraged them to create Shorts videos with the hashtag #WrittenInGlossier in the caption. People who tapped the hashtag were brought to the Glossier website. There, they could buy the eyeliner and were asked to recreate a look as part of the challenge. Any Shorts video that included the hashtag was shoppable.

2023 will likely be a year for more shopping features to proliferate on video platforms, with Shorts, TikTok, and Instagram duking it out for consumers’ attention amid a recessionary economy. Who will win? We’ll report progress here.

Contact True Interactive

We deliver results for clients across all ad formats, including video and mobile. To learn how we can help you, contact us.

Why Google Is Bullish about Winning Its Fight with TikTok

How Brands Are Using YouTube Shorts

Why Google Brought Advertising to YouTube Shorts

Why YouTube Shorts Matters to Brands

Why Google Is Bullish About Winning Its Fight with TikTok

Why Google Is Bullish About Winning Its Fight with TikTok

Google YouTube

Alphabet, Google’s parent, announced third-quarter earnings that fell short of expectations. Normally an earnings miss is cause for concern especially during recessionary times. But the company sounded upbeat. In fact, Alphabet believes it’s making the right investments for long-term growth, including one crucial YouTube feature.

The Numbers

First, let’s take a look at the numbers. For the third quarter, Alphabet reported:

  • Revenue: $69.09 billion vs. $70.58 billion expected, according to Refinitiv estimates.
  • Google advertising revenue: $54.48 billion, up 2.5 percent year over year but down 3 percent between the second and third quarters. (By contrast, Google’s ad revenue jumped 43.2 percent between the second and third quarters of 2021.)
  • YouTube advertising revenue: $7.07 billion vs $7.42 billion expected, according to StreetAccount estimates.

The decline in ad revenue for YouTube is most bothersome for Google, especially because YouTube rival TikTok continues to pick up steam. Advertisers are finding something better on TikTok: younger, highly engaged audiences who prefer TikTok’s short-form video content.

According to Statista, TikTok generated $4.0 billion in advertising revenue in 2021, a figure that is expected to double by 2024 and triple by 2026.Digiday reported just a few days ago that ad agencies are shifting content creation from Instagram and YouTube to TikTok. In April, Insider Intelligence predicted that TikTok’s ad revenue will grow 184% to nearly $6 billion in 2023 (that amount tops Twitter and Snap combined). Meanwhile, Insider Intelligence says that Influencer-marketing spend on TikTok will overtake YouTube in 2024.

YouTube Is Fighting Back

But Alphabet CEO Sundar Pichai says he is confident that Google will turn things around. One reason: the company has developed an answer to TikTok.

YouTube recently launched Shorts, which is YouTube’s version of short-form TikTok videos. Shorts is basically a TikTok copycat. Using the YouTube app, people can quickly and easily create short videos of up to 15 seconds. The videos are created on mobile devices and viewed, in portrait orientation, on mobile devices. And once you open one short, you essentially access the motherlode in that videos start playing one after the other. Just swipe vertically to get from one to the next.

According to YouTube, more than 1.5 billion people use Shorts – impressive numbers that actually surpass TikTok’s user base. As a result, more brands are creating campaigns on Shorts. It’s early days for Shorts and brands, but Shorts has two big advantages over TikTok:

  • Integration with YouTube, which has 2.6 billion active users. This is important because YouTube can promote Shorts to the built-in user base, and brands can connect Shorts content to their already established YouTube presence.
  • A creator monetization program that is more favorable than TikTok’s. YouTube recently announced Shorts will soon be eligible for monetization, and creators will keep 45 percent of the revenue generated from viewership. Having more savvy and popular creators on Shorts will generate more ad revenue for YouTube – and likely attract more brands.

Shorts is a fledgling operation. It only recently launched an ad program. But in an earnings call with investors, Pichai voiced optimism that the company’s investment into Shorts will pay off. He reiterated YouTube’s commitment to Shorts monetization, challenging TikTok directly, and attracting creators to the platform.

He has one other reason to feel upbeat. TikTok continues to grapple with a recurring and very ugly issue about its possible threat to national security related to accusations of privacy breaches — an issue that flared up in 2020 and is making headlines again. Who knows how that is going to turn out?

The best course of action for YouTube is the one that the company has chosen already: answering TikTok as it has done and capitalizing on its built-in user base. This will take time, and investors are impatient, especially during a down economy. But Alphabet has the cash to ride out the down times and continue to make YouTube more appealing to advertisers and creators.

Contact True Interactive

We deliver results for clients across all ad formats, including video and mobile. To learn how we can help you, contact us.

The Most Popular Social Media Apps for Teens

The Most Popular Social Media Apps for Teens

Social media

How are teens spending their time on social media these days? This is an important question for advertisers. That’s because teens spend money. They talk about their favorite brands with each other. Their preferences influence the popular cultural trends that advertisers need to understand in order to stay relevant. And if advertisers play their cards right, they can, in turn, influence teen behavior.

A new survey of Americans aged 13-17 from Pew Research Center reports some eye-opening findings about where and how teens are spending their time online. Key findings:

  • YouTube reigns. 95 percent of teens use YouTube, followed by TikTok, Instagram, Snapchat, and Facebook.

Social Media Apps

  • Only 32 percent use Facebook, compared to 71 percent in 2014-15. Not only is there a smaller share of teenage Facebook users than there was in 2014-15, teens who do use Facebook are also relatively less frequent users of the platform compared to the other platforms covered in this survey. Just 7 percent of teen Facebook users say they are on the site or app almost constantly (representing 2 percent of all teens). Still, about six-in-ten teen Facebook users (57 percent) visit the platform daily.

Leading Social Sites

  • Many teens are always on. 46 percent of teens say they’re on the internet “almost constantly,” up from 24 percent in 2014-2015.  Roughy one in five teens are almost constantly on YouTube, which leads all platforms.

Social Media Usage

  • The vast majority of teens have access to digital devices, such as smartphones (95 percent), desktop or laptop computers (90 percent) and gaming consoles (80 percent). Since 2014-15, there has been a 22 percentage point rise in the share of teens who report having access to a smartphone (95 percent now and 73 percent then). While teens’ access to smartphones has increased over roughly the past eight years, their access to other digital technologies, such as desktop or laptop computers or gaming consoles, has remained statistically unchanged.
  • More affluent teens are particularly likely to have access to all three devices. Fully 76 percent of teens that live in households that make at least $75,000 a year say they have or have access to a smartphone, a gaming console and a desktop or laptop computer, compared with smaller shares of teens from households that make less than $30,000 or teens from households making $30,000 to $74,999 a year who say they have access to all three (60 percent and 69 percent of teens, respectively).
  • U.S. teens living in households that make $75,000 or more annually are 12 points more likely to have access to gaming consoles and 15 points more likely to have access to a desktop or laptop computer than teens from households with incomes under $30,000.
  • Habits vary by demographic. Teen boys are more likely than teen girls to say they use YouTube, Twitch and Reddit. Teen girls are more likely than teen boys to use TikTok, Instagram and Snapchat. Higher shares of Black and Hispanic teens report using TikTok, Instagram, Twitter and WhatsApp compared with white teens.

Implications for Brands

  • Short-form content on TikTok is popular, but so is longer-form content on YouTube. Within just a few years, TikTok has famously rocketed to popularity by featuring videos that are about 30 seconds in length (often shorter). But YouTube’s popularity demonstrates that teens also like more in-depth video content, as Mashable points out. Longer-form content lends itself to content marketing, such as “how to” topics and podcasts, as noted here. On the other hand, shorter-form TikTok videos lend themselves to catchy, engaging micro-moments. To use a television analogy, TikTok is the place for 30-second spots, and YouTube for advertorials. As one influencer on LinkedIn wrote, “If digital media is hunger, TikTok feels like McDonalds, and YouTube feels like [insert fairly decent quality restaurant]. TikTok gives you dopamine hits. It’s addicting, you can become consumed by it, but it doesn’t mean you’re satisfied with the quality. Each swipe is, ‘okay, now what’s next.’ Before you know it, it’s an hour. YouTube, even with most videos watched being through recommendations, provides a deeper connection with the viewer. If you watch a video for >1min, you’re truly invested. This also means that creators will build more meaningful viewer connections through YouTube. All data shows that Gen Z appreciates the quality and connections of YouTube.”
  • Teens are not all the same. Variances exist by income level and demographic, as noted above. It’s important to understand the differences depending on your audience. In addition to the statistics cited above, we also noticed the popularity of gaming consoles among more affluent teens. And overall, Hispanic (47 percent) and Black teens (45 percent) are more likely than white teens (26 percent) to say they use at least one of the five most popular social media online platforms almost constantly. And teen girls are most likely to be social media loyal than teen boys: teen girls are more likely than teen boys to express it would be difficult to give up social media (58 percent versus 49 percent). All of these nuances influence any company that wants to launch a credible multi-cultural marketing strategy.
  • Facebook still matters, but Instagram does even more. Even though it’s less popular among teens than it was in 2014-15, it’s still more popular with teens than Twitter, Twitch, WhatsApp, Reddit, and Tumblr. As teens get older, they may very well spend more time on Facebook. And Facebook the platform still enjoys widespread usage among adults, as seen in other recent Center studies. However, it’s clear that among Meta’s brands, Instagram is more important for reaching teens, especially as Instagram morphs into a social selling site.

Contact True Interactive

We deliver results for clients across all ad formats, including social mediavideo, and mobile. To learn how we can help you, contact us.

Photo by Rami Al-zayat on Unsplash

How Brands Are Using YouTube Shorts

How Brands Are Using YouTube Shorts

YouTube

The rise of TikTok is one of the most phenomenal stories in the digital world. Since launching globally in 2018 through a merger with Musical.ly, TikTok has become a multi-billion-dollar advertising machine. TikTok has more than 1 billion members, has surpassed Snapchat to become the most popular app with teens, and is on course to earn more than $11 billion in ad revenue in 2022.

TikTok has succeeded by becoming the preferred app for short-form videos. Although users can post videos that are as lengthy as 10 minutes, the ideal TikTok video is about 30 seconds long. Some of the most popular TikTok videos of all time, racking up billions of views, are blink-and-you’ll-miss-them short.  As a result of TikTok’s popularity, brands are spending more money advertising on the app, which is a threat to more established apps such as YouTube and Instagram.

Because of TikTok’s popularity, YouTube and Instagram have responded in kind by launching short-form video features. For example, in 2021, YouTube rolled out Shorts globally after a more limited launch in India in 2020. Although YouTube Shorts is not yet a source of meaningful advertising revenue for YouTube, it is gaining traction with brands.

What Is the YouTube Shorts Feature?

Shorts is basically a TikTok copycat. Using the YouTube app, people can quickly and easily create short videos of up to 15 seconds. The videos are created on mobile devices and viewed, in portrait orientation, on mobile devices. And once you open one short, you essentially access the motherlode in that videos start playing one after the other. Just swipe vertically to get from one to the next.

Shorts, much like TikTok, provides editing tools you can use to flex creative muscle. Users can string clips together, adjust playback speed, and add music and text. And as YouTube has blogged, creators can play off of existing content: “[Y]ou can give your own creative spin on the content you love to watch on YouTube and help find it a new audience—whether it’s reacting to your favorite jokes, trying your hand at a creator’s latest recipe, or re-enacting comedic skits.” (Notably, creators are in control of their material; they can opt out of having their long-form videos remixed in this way.)

According to YouTube, more than 1.5 billion people use Shorts – impressive numbers that actually surpass TikTok’s user base. It was only a matter of time before YouTube made it possible for brands to get involved creating their own Shorts. And they are.

How Are Brands Using YouTube Shorts?

As reported in The Wall Street Journal, brands are increasingly experimenting with ways to engage with users on Shorts. For example:

  • Kitchen and home marketplace Food52 is posting Shorts that offer sneak peeks at its longer-form content on the traditional version of YouTube, as well as repurposing some recipe videos.
  • Drupely’s olive-oil brand Graza says it is creating user engagement by posting how-to cooking and recipe content. According to Graza, videos focused solely on Graza products do better on TikTok than on Shorts.
  • Glossier sold products through Shorts in June by creating a challenge for users to try. Glossier gave about a hundred influencers a new pencil eyeliner and encouraged them to create Shorts videos with the hashtag #WrittenInGlossier in the caption. People who tapped the hashtag were brought to the Glossier website. There, they could buy the eyeliner and were asked to recreate a look as part of the challenge. Any Shorts video that included the hashtag was shoppable.
  • Danessa Myricks Beauty used a short to promote its launch in Sephora. The Short built excitement for the launch by featuring the sending off a package of its product to be sent to Sephora stores.
  • NBC’s The Voice relied on Shorts to feature hosts for its most recent season. The ad included a banner at the end with clear directions for viewers on when and where to watch the show.

This is all encouraging for Shorts, but the feature is not yet a revenue generator, and YouTube is under pressure to staunch the flow of ad dollars to TikTok. On top of that, Instagram is turning up the heat with its own TikTok challenger, Reels.

Even so, YouTube is striking a note of optimism.

Philipp Schindler, senior vice president and chief business officer at Google, said during second-quarter earnings call in July. “…[E]arly results in Shorts monetization are also encouraging, and we’re excited about the opportunities here.”

It’s early days for Shorts and brands. Meanwhile, Shorts has one big advantage over TikTok: integration with YouTube, which has 2.6 billion active users. This is important because YouTube can promote Shorts to the built-in user base, and brands can connect Shorts content to their already established YouTube presence.

What Brands Should Do

  • Know your audience. YouTube appeals to the 15-25-year-old demographic. It is also very popular among 26-35-year-olds. TikTok skews younger: it is most attractive to 16-24 year-olds.
  • Be ready to capitalize on Shorts ad formats when they become available widely. For instance, brands will be able to connect their product feeds to their campaigns and make video ads on YouTube Shorts more shoppable.
  • Understand how to integrate Shorts ad formats into a broader YouTube advertising strategy that includes skippable video ads, bumper ads, overlay ads, and others.

Contact True Interactive

We deliver results for clients across all ad formats, including video and mobile. To learn how we can help you, contact us.