Did YouTube Survive TikTok's Best Punch?
Retail media may need a media push
YouTube’s ad revenue climbed another 13% in Q2 to $8.66 billion - a strong number to be sure - but below Wall Street’s expectations.
Perhaps even better news - though lacking in specificity - is that YouTube exhibited “healthy watch time growth,” said CFO Ruth Porat.
It sometimes easy to forget that YouTube is nearly 20 years old, and it keeps growing every quarter. That’s in spite of TikTok’s emergence over the past few years as perhaps its fiercest competitor and biggest threat.
Some of that can surely be attributed to YouTube’s growth on TV, where it now accounts for 10% of all TV viewing, streaming, linear or otherwise.
But clearly, YouTube has real got momentum with Shorts, which YouTube bas been touting for several quarters.
If you’d have asked me, I’d have bet that Shorts would be seen as a TikTok rip off and just wouldn’t work. But according to ad buyers, it’s a format that is not only thriving, but helping fuel other content on YouTube. YouTube’s VP of Americas Tara Walpert Levy recently told me that Shorts are even a surprise hit on TV- a medium where TikTok has tried to make inroads - and largely struck out.
It’s enough to make wonder whether YouTube - which is battling with Netflix in streaming, has taken TikTok’s best punch and come back stronger.
I recently chatted with Ryan Stern, Co-Founder & CEO ofCollectively, part of the Brandtech Group, (as part of my ongoing series, in partnership with VuePlanner). She noted that in recent years, “TikTok has been really the darling, it’s undeniable. But we are seeing a bit of a shift.”
“Our clients are asking us about connecting YouTube Shorts strategies even more.”
Stern said that goes for creators as well, who are looking to lean into YouTube’s ability to deliver a cross platform audience (e.g. Shorts, YouTube proper, TV).
“That ecosystem is getting defined,” she said.
The ecosystem effect is something TikTok really can’t mimic - yet. Depending on who you ask, it appears that TikTok’s growth has slowed.
However, let’s not overstate thing here. The app regularly ranks atop the major app store rankings. TikTok is still a place with uncommon real time virality and cultural breakouts - witness Kamala Harris’s wild meme fall and rise.
And by going the full on destination route, TikTok has shopping nailed - an area where YouTube is playing catchup.
“I think they are smart to find features that are additive,” said Stern, who mentioned a hair creator who is pushing his own brand on YouTube. “You want to have the option in all of these platforms to connect to purchase.”
While shopping is a work in progress, it’s important to look at YouTube’s overall enduring impact. Check out Business Insider Amanda Perelli’s piece on YouTube’s renewed swagger at VidCon “Several lifestyle influencers said on a panel that if they were starting out as creators today, they'd choose YouTube Shorts or Instagram Reels; none of them picked TikTok.”
Ouch.
Stern said that some creators are in fact a bit worried about the possibility of a TikTok ban - but in this totally upended presidential race, who knows if that’s a priority for either candidate? If I’m TikTok, there’s certainly no reason to panic when you are sucking up hours of people’s time each day, but I’d redouble my efforts to see if I can make sense of TV. I’d lean further into long form, and maybe make it easier to see content from top creators more regularly.
Regardless, it seems clear that this battle is far from over.
Retail Media meets Media Media?
I just spend the earlier part of the week at the Beet Retreat up in the Berkshires. It was a fantastic event, featuring tons of top media execs and excellent (off the record) discussions.
Based on my conversations with folks there, as couple of interesting themes emerged:
There is this continuous uncertainty hanging over the entire ad tech market that can basically be summed up as “are regulators going to change everything? Or nothing?” Not unlike the endless state of the cookie discussions, it’s hard for companies to make decisions when they aren’t sure of the rules, and where European regulators or various US states are about to drop the hammer.
Some retail media execs showed a surprising willingness to at least consider partnerships with one another to help grow the category, while gaining some clout and efficiencies. It will be interesting to see if any alliances surface, given how many players there are and how big Amazon, Walmart and a few others have become.
One theory that was floated - might retail media companies want to invest more in their own content - and become full on media companies? We’ve seen players such as Walmart bundle media services like Paramount+ in their own subscriptions. Could we see a RMN build a FAST strategy, or even start licensing shows? That’s a pricey, cluttered battlefront.
One idea I could see gaining traction - pure speculation on my end - is retailers investing in, or buying distressed digital publishers. I could see this as a way to extend their own ads + data businesses, while creating something of a flywheel effect. We’ll see.