Believe it or not, brands are still sleeping on YouTube

While marketers agonize over walled gardens and addressable fantasies, Google has the true CTV killer app

There have been approximately 4,700 new streaming services launched over the past year.

And yet two of them account for 47% of the streaming time in the US, according to recent comScore data compiled by LightShed Partners. Only one of the two - YouTube - actually carries advertising. 

Yet advertisers seem to spend an inordinate amount of time focused on the other guys, seeking ways to hack TV to make it work like digital media when a dominant player is staring them in the face.

Can I actually make you feel like Google is getting a raw deal? More on that in a moment.

If you haven’t guessed by now, the other part of that 47% is Netflix.

What was really interesting from the LightShed analysis is that despite the emergence of more high-profile competition (HBO Max, Paramount+ Peacock), the two streaming leaders Netflix and YouTube haven’t lost share over the past six months. Rather, the new guys are stealing streaming time from tier 2 players like Disney+ and Amazon Prime.

It’s that impressive YouTube resilience that was on my mind this past week as I roamed the halls of Hudson Yards for the yes-we’re-back-in person version of Advertising Week.

It seems that in every other panel session, ad executives were gushing with enthusiasm over the potential of CTV - that is until they got into the details. Measurement is tricky. Managing reach frequency? Forget it- there are like 12 walled gardens. Measuring impact? Yes, as long as I have some kind of custom report that only works in this one instance. Using first-party data - um, yes, sort of, but the rules are different everywhere.

Is there enough CTV ad space out there? 

“There is demand,” said Amy McGovern, vp of addressable sales, Warner Media. “One of the biggest challenges is scale.”

When executives weren’t gushing over CTV’s potential, they remained fixated on espousing addressable TV, the industrys’ perennial next big thing. For at least 10 years, media buyers have tortured themselves to deliver specific ads to specific homes that may be in the market for a minivan at a given moment, with the hope that somehow they’ll be able to stitch it all together and measure it like the web.

“I think we all thought that it would scale a lot faster than it has,” said Jamie Power, Chief Data Officer & COO of Advanced TV Cadent - one of addressable’s true OGs. “We’ve heard it’s still not easy to execute...or to scale an audience across all screens.”

Yet somehow, with the rise of automated content recognition (ACR )technology, there is still this belieff that advertisers will be able to use TV sets to insert addressable ads in national broadcasts - that is, as long as virtually every TV company cedes control of their inventory and potentially blows up their ratings data. At which point, you’ll have a very clever way to swap out ads during linear broadcasts reaching hordes of 75-year-olds.

In my mind, it comes down to this - you can kill yourself to make all these advanced TV platforms work - or you can just buy YouTube.

Google says YouTube reaches 120 million viewers on connected TVs in the US. eMarketer predicts that YouTube will pull in $2.89 billion in CTV money this year, and $5.45 billion in 2022.

It still feels like YouTube is getting short-changed.

If you think about it, running ads on CTV via YouTube is the ultimate end around when advertising within the new crop of TV walled gardens. YouTube is on every set, and you don’t have to go through Amazon or Roku or Samsung or whatever tollkeeper is in charge. You can likely even bring your data to the party. This is why the stakes are so high in this ongoing battle with Roku and YouTube over distribution - Roku’s control is threatened - but YouTube has massive leverage.

Yet per Ad Age, YouTube still struggles to win TV budgets because brands say the platform has some shortcomings in measurement and campaign management. As if the rest of TV has that stuff nailed.

I’m not saying that YouTube doesn’t need to invest more in whatever tools brands need to make it comparable to TV and easy to evaluate. However, I suspect at the heart of this hesitancy is the old ‘dogs on skateboards’ stereotype from 15 years ago.

Brands still see YouTube as something ‘lesser’ because of its content makeup, and its viewership patterns. 

Digging deeper, there is this bizarre enduring obsession in our industry that True TV Ads can only be in ‘Real’ TV shows - that the immersion and brand halo of an hour-long drama can never be matched by anything short or webby.

Ok, well, see if you can get my sons to answer a basic question, such as what they want for dinner, when they are watching Sypherpk or Nickeh30 or some other YouTuber break down Fortnite weaponry.

Advertisers and ad buyers cling to these bizarre conventions - that TV advertising is about concurrency and prestige. To the average person, watching your favorite creators -whether we’re talking about an Arianna Grande video, Ninja being Ninja, a favorite makeup artist showing off a new approach to smokey eyes, or a Dick Wolf show about the Chicago Postal Service - is plenty prestigious.

And in terms of gathering to watch this stuff at the same time, in this on-demand era, that kind of behavior is increasingly a rarity.

As one ad observer put it, why does Lowes care if viewers are watching the same thing all at once as long as you get the message on time?

To be fair, brands like Lowes care if there’s a big sale this weekend, or if a new movie is opening. But you can cume up 10 million people in one day or one hour on YouTube, just like you can with one spot on Monday Night Football. Does only the latter make you go into a frenzy to buy linens? 

I’ve actually had conversations with the folks at YouTube about how they should sell their daily reach in more TV-like packages But seriously, outside of sports, this concurrent viewing thing isn’t going to matter much longer anyway.

In terms of what brands want from CTV, and TV in general, far be it from me to shill for the duopoly, but YouTube checks every box. Yes, you have to deal with using Gogole’s identifiers and attribution tools and metrics. They are all very black box, but they sure seem to work and operate at a scale most of CTV can’t touch.

Correct me if I’m wrong, but YouTube’ has got a mature back-end delivery system that any CTV player, including Roku, would dream about.

In fact, the dark secret is that YouTube cuts across every new TV walled garden - it’s on every connected TV, regardless of gatekeeper. This is why Roku cannot afford to screw around, since the loss of YouTube on TV could be a deal-breaker for many households. I’ll just tell you that it would be a problem in my house if my basement Roku TV can’t get YouTube in the long term.

Again, YouTube content is TV for young people, as is Snap and Twitch and TikTok. BTW, wouldn’t you love to see the ComScore share numbers with those guys included?

I suppose you could argue of course that a medium you watch on your phone and constantly swipe up to change the channel is less fully engaging than something you just ‘watch’ (I don't have the research to prove it). But you could also argue that all of YouTube consumption, whether on CTVs, phones, tablets or wherever, is as engaging as TV. Give a teen headphones and your phone and see if you can get them to pay attention to anything short of nuclear war.

Alas, it may take a while for YouTube to get the credit it deserves among the TV budget-doling crowd. But I do wonder what happens the more people make watching YouTube on their main TV a living room habit. There’s already a big repetitive ads problem with much of CTV. The more you watch YouTube next to the others, the more you’re just going to scream to skip ads - like you can on YouTube.

For YouTube, the beauty of having seemingly endless inventory is that it’s not a big deal if people skip ads (unlike say Paramount+).

This is a question for another newsletter, but is it not out of the question that skipping ads on CTV becomes standard at some point? I realize that dynamic would seriously screw up upfront projections.

If you really want to get crazy, what happens when all these newish streaming entrants start realizing they can’t all win? Instead of building their own ad tech, trafficking, data, and targeting systems, they say “forget it - let me outsource it to somebody who knows what they are doing.”

Like, say, YouTube.