For the first time, a streaming platform has captured a 10% share of TV viewing according to Nielsen data released for July 2024. But it’s not Netflix that achieved this milestone. Not Amazon. Not Disney+. No, the king of streaming is YouTube.
Overall, streaming has captured 41.4% of TV viewing for July 2024, which is the largest share for any viewing format since Nielsen began tracking streaming data. YouTube’s 10.4% share is challenged only by Netflix, which has an 8.4% share. To put those numbers in perspective, NBC’s Peacock enjoyed a significant boost thanks to the Summer Olympics, but Peacock’s share is only 1.5%.
The numbers reflect YouTube’s leadership as audiences continue to migrate to streaming. At this point, YouTube is a veteran of the streaming industry, having existed for two decades. But while rivals such as Netflix have caught the notice of industry watchers, YouTube has flown beneath the radar screen, largely because the platform continues to be viewed as a destination for user-generated cat videos even though YouTube is more than that.
The data also shows that audiences have an appetite for free ad-supported content. In recent years, the streaming landscape has witnessed the rise of free advertising-supported streaming television (FAST), whose major players include Tubi and Pluto TV. These networks primarily offer professionally produced content like TV shows and movies. Technically, YouTube is not a FAST network because YouTube’s content is largely user-generated, and its business model is not 100% dependent on advertising. But the message is clear, nevertheless: audiences are receptive to ads in the streaming world.
Why YouTube Is Popular
So, why is YouTube so popular? Well, yes, there is a demand for user-generated cat videos, and YouTube has captured the market for user-generated content. But the reasons are more complex. They include:
Diverse Content Ecosystem
One of the primary reasons for YouTube’s immense popularity is its incredibly vast and diverse range of content. The platform allows anyone to upload videos, resulting in an enormous variety of content that spans from amateur creators to professional productions. Users can find entertainment in various forms, including music videos, comedy sketches, vlogs, and more. For example, MrBeast, known for expensive stunts and giveaways, has more than 100 million subscribers. YouTube has also become a home for live sports thanks to YouTube’s relationships with major sports leagues such as the NFL. Additionally, YouTube serves as a valuable educational resource, offering tutorials, lectures, and how-to videos that cater to those seeking to learn new skills. It also functions as a source for news and commentary, allowing users to stay informed about current events.
Accessibility and Reach
YouTube’s widespread availability has played a crucial role in its success. The platform can be accessed on multiple devices, including smartphones, tablets, computers, and smart TVs, making it convenient for users to watch content anytime and anywhere. Its global reach is another significant factor, as YouTube is accessible in numerous countries and languages, allowing it to connect with a massive worldwide audience. The core platform is free for viewers, which lowers barriers to entry and encourages more people to engage with the content.
Creator Economy and Monetization
YouTube has fostered a thriving ecosystem for content creators, which has significantly contributed to its popularity. The YouTube Partner Program allows creators to monetize their content through advertising revenue, providing an incentive for individuals to produce high-quality videos. In addition to traditional ad revenue, creators can explore alternative monetization options such as Super Chat, channel memberships, and merchandise shelves, creating multiple income streams. This has led to the emergence of many full-time creators who have built successful careers on the platform, attracting even more talent and creativity.
Technological Innovation
The platform supports various video quality improvements, including HD, 4K, and even 8K playback, ensuring that viewers have access to high-quality content. The introduction of live streaming capabilities has enabled real-time broadcasts and interactions, further enhancing user engagement. Additionally, YouTube has embraced new immersive video formats, such as 360-degree and virtual reality content, appealing to a tech-savvy audience.
Personalization and Engagement
YouTube’s features encourage user engagement and personalized experiences, which are vital for retaining viewers. The recommendation algorithm suggests videos based on users’ viewing history, keeping them engaged and encouraging longer viewing sessions. The platform also allows for interaction through comments and community features, fostering a sense of belonging among viewers and creators alike. Users can curate their own viewing experiences through playlists and subscriptions, making it easy to follow favorite content creators.
Integration and Sharing
The ease of sharing YouTube content across the internet has significantly contributed to its popularity. YouTube videos can be easily embedded into other websites and platforms, expanding their reach beyond the platform itself. Additionally, the simple sharing options for various social networks enable users to share their favorite videos with friends and followers, further amplifying the platform’s visibility and engagement.
YouTube’s Brand Recognition
Over time, YouTube has developed a strong brand identity, becoming synonymous with online video. It is often the first platform that comes to mind when people think of video content on the internet. The platform’s cultural impact has also been profound, influencing internet culture and giving rise to numerous viral phenomena, which keeps it relevant in the fast-paced digital landscape.
For these reasons, YouTube boasts approximately 2.49 billion users worldwide, making it one of the most popular social media platforms. This figure represents about 47% of all global internet users who access the platform monthly. The largest user base is found in India, with at least 462 million users, followed by the United States, where around 77.7% of adults aged 18 and above engage with YouTube.
In terms of generational demographics, YouTube is particularly popular among younger audiences. More than half of its users (50.6%) belong to the Gen Z and Millennial age groups, highlighting its appeal to these demographics. Specifically, users aged 18 to 34 account for around 54.3% of the platform’s global audience, with the largest age group being those aged 25 to 34, who make up 21.3% of users. In contrast, Baby Boomers represent only about 15% of the user base.
Implications for Advertisers
The latest Nielsen data also underscore why streaming platforms such as Netflix and Disney+ have introduced ad-supported tiers. With so many viewers moving to streaming, platforms want to cash in. And, they have to. They cannot exist on subscribership growth alone as the market becomes saturated.
Here, YouTube enjoys a major advantage. Unlike Netflix and other platforms, YouTube has deep experience and scale with ads. Advertising is a juggernaut for YouTube. In 2023, YouTube generated $31.5 billion in advertising revenue, a 7.8% increase from 2022. This is up from $29.2 billion in 2022 and $28.8 billion in 2021. By contrast, Netflix likely won’t achieve $7 billion until 2027. Overall, YouTube ads accounted for 10.09% of Alphabet’s overall revenue in the first nine months of 2023.
How did YouTube’s ad business get so big? Partly the answer is that YouTube lacked serious competitors for many years. But YouTube also gets credit for providing a diverse array of ad units. They include:
TrueView Ads
One of the primary ad formats on YouTube is TrueView, which consists of two main types: video discovery ads and in-stream ads. Video discovery ads appear in YouTube search results, on the homepage, and in the sidebar next to related videos, requiring viewers to click to watch. In contrast, in-stream ads play before, during, or after other YouTube videos and can be skipped after a few seconds. Advertisers only incur costs for in-stream ads if viewers watch for at least 30 seconds or choose to click on the ad, making this format particularly effective for engagement.
Bumper Ads
Bumper ads are characterized as short, non-skippable ads that last up to 6 seconds. These ads can appear before, during, or after other videos and are ideal for quick promotions or reinforcing brand messages. Their brief duration encourages advertisers to create concise and impactful content that captures viewer attention immediately.
In-Feed Video Ads
In-feed video ads are designed to appear on the YouTube homepage, in search results, and as related videos. These ads come with a companion banner display ad on the video watch page, providing additional visibility and engagement opportunities for advertisers. This format allows brands to integrate their messaging seamlessly into the user’s browsing experience.
Targeting Options
YouTube’s advertising platform leverages Google’s extensive user data to provide precise targeting options. Advertisers can target audiences based on various demographics, including age, location, and gender, as well as interests and behaviors. Keyword targeting enables contextual advertising, allowing ads to be shown alongside relevant content. Additionally, advertisers can specify device types and operating systems to further refine their audience reach.
Bidding Strategies
To accommodate different campaign goals, YouTube offers various bidding strategies. Advertisers can choose from cost per view (CPV), cost per action (CPA), and cost per thousand impressions (CPM). These flexible options allow businesses to optimize their ad spend based on their specific objectives and performance metrics.
Ad Placements
YouTube provides multiple ad placements to maximize visibility. Ads can be displayed within YouTube search results, before or during YouTube videos, and across Google Display Network partner sites. This extensive reach ensures that advertisers can connect with their target audiences across various contexts.
Advanced Features
YouTube’s ad offerings include advanced features designed to enhance engagement and effectiveness. Advertisers can utilize call-to-action overlays to encourage viewer interaction, companion banners for additional visibility, and custom scheduling to control when their ads appear. Frequency capping allows advertisers to manage how often their ads are shown to the same user, ensuring a balanced approach to ad exposure.
Advice for Advertisers
Audiences are clearly receptive to advertising. But brands need to capitalize on the nuances of ads on streaming platforms in order to succeed. Here are some tips:
Develop Content-Specific Ads That Mirror Streaming Trends
When creating ads for streaming platforms like YouTube, focus on the type of content that users are consuming. Streaming is no longer just about watching a show—it’s about engaging with content that aligns with individual interests. For example, Toyota recognized the growing trend of live sports on YouTube and targeted its ads specifically during NFL game highlights and live streams. This allowed them to connect directly with passionate sports fans in real-time. Similarly, beauty brands like Glossier have effectively placed tutorial-style ads during popular beauty vlogs, blending seamlessly with the content viewers are already engaged with. These ads mimic the style of the content and feel less intrusive, increasing viewer engagement and ad recall.
Take Advantage of Dynamic Ad Insertion in Live Streaming
Live streaming on platforms like YouTube offers a unique opportunity for real-time ad placement, known as dynamic ad insertion (DAI). Brands like Red Bull have capitalized on this by inserting ads during live streams of extreme sports events, which aligns perfectly with their brand identity. This method allows advertisers to place relevant ads in real-time, reaching an audience when they are most engaged. The key here is to ensure that your ad is not only relevant but also enhances the live experience. For example, during a live concert stream, a music streaming service could insert ads that promote exclusive backstage content or early access to new releases, making the ad feel like a part of the event rather than a disruption.
Use YouTube’s Shoppable Ads for Direct Conversions
Shoppable ads on YouTube have proven to be a game-changer for brands looking to drive direct conversions. Nike successfully used this format during their product launch campaigns, allowing viewers to purchase items directly from the ad without leaving the platform. This seamless integration of shopping and streaming enhances the user experience and reduces the steps needed to make a purchase, increasing conversion rates. If you’re a retail brand, consider using shoppable ads to showcase your products in action, especially during relevant content like unboxing videos or product reviews.
Maximize Reach with Cross-Platform Campaigns
Brands like Coca-Cola have successfully used cross-platform campaigns to maximize reach across different streaming services. For instance, during the holiday season, Coca-Cola synchronized their ads across YouTube and Hulu to ensure that viewers encountered consistent messaging, whether they were watching user-generated content or professional shows. By tailoring the creative to each platform while maintaining a unified campaign message, Coca-Cola ensured a broader reach and deeper engagement. If your brand is running a major campaign, consider how you can adapt your message to different streaming platforms, ensuring that your ads are seen by audiences regardless of where they are watching.
Embrace Long-Form Content on Streaming Platforms
While short ads are effective for quick brand messaging, long-form content can be powerful on platforms like YouTube, where viewers are often willing to spend more time with content they find valuable. Apple, for example, has created mini-documentaries and behind-the-scenes content that serve as extended ads. These ads not only promote products but also tell a story that resonates with the audience, making them more memorable. For a brand that has a complex story to tell or wants to showcase its values, investing in longer content that engages viewers on an emotional level can be more effective than traditional 30-second spots.
Rely on Influencer Partnerships for Authentic Engagement
Influencer marketing has found a natural home on streaming platforms, particularly YouTube. Brands like Samsung have partnered with top influencers to create content that feels organic while subtly promoting their products. For example, Samsung’s collaboration with tech reviewers on YouTube has allowed Samsung to showcase new devices in an authentic way, with influencers demonstrating the features in real-world scenarios. This strategy works because it blends the brand’s message with content that viewers trust and engage with regularly. If your brand wants to build credibility and trust, consider partnering with influencers who align with your target audience and content style.
Use Retargeting to Reinforce Brand Messaging
Retargeting is an essential tool in streaming advertising, especially on platforms like YouTube where viewers may see your ad multiple times. Amazon Prime Video has effectively used retargeting to promote its original shows. By serving different ads to viewers who have shown interest in similar content, Amazon keeps its shows top of mind without becoming repetitive. For brands, this means creating multiple variations of your ads that can be served to viewers based on their previous interactions with your content. If someone watched half of your ad but didn’t click through, retarget them with a follow-up ad that offers a new angle or incentive.
Adapt to Changing Viewer Behavior with Real-Time Optimization
Streaming platforms allow for real-time data analysis and campaign adjustments. Brands like PepsiCo have taken advantage of this by constantly tweaking their campaigns based on performance metrics.
One example is PepsiCo’s campaign during Super Bowl LV (2021). PepsiCo, through its Pepsi brand, focused heavily on its Super Bowl Halftime Show sponsorship. While they didn’t air traditional Super Bowl ads for its beverages, PepsiCo used real-time data on platforms like YouTube to maximize engagement around the Halftime Show featuring The Weeknd. By monitoring which parts of their campaign were resonating most with viewers, PepsiCo adjusted its digital ad placements and content on the fly, ensuring its messaging stayed relevant and captured audience attention during and after the event.
This approach allowed PepsiCo to optimize its ad spend and maintain strong brand visibility throughout one of the biggest live events of the year. By using real-time data, Pepsi effectively adapted their strategy to viewer behavior.
Contact True Interactive
At True Interactive, we’ve been helping our clients maximize their digital ad spend since the dawn of digital. To learn about our client successes, visit our website and read our case studies about digital advertising.
Photo credit: Rubaitul Azad
