Meta is Pushing 'Partnership Ads' in a Quest to Challenge YouTube. Neither Creators or Buyers Seem Happy.

Why neither side appears comfortable

Meta has seen YouTube become a dominant player in connected television, while stealing a significant chunk of TV dollars - all while becoming the centerpiece of the booming creator advertising economy.

It wants in.

It won’t be so easy - given several fairly fundamental differences between how YouTube and Reels - Meta’s core video hub - operate, particularly on the advertising side.

For starters, the obvious difference is that YouTube has long paid creators 55% of the money it pulls in from pre-roll ads. But even putting that aside, Meta is facing an uphill climb in convincing brands and buyers that Reels (along with Facebook Video) is a viable outlet for all these creator/ad dollars).

That’s because Reels is not exactly a hotbed for most top YouTube and Twitch talent, despite its massive scale. Creators can’t always rely on organic viewership, which makes them less inclined to invest in the platform - and makes brand integrations less attractive to media buyers.

Meta’s answer is Partnership Ads

“Meta is out there beating the drum today,” said Arthur Leopold, founder of Agentio, at a recent Next in Media event in New York. “The most performant ad unit on Meta are partnership ads. That’s really hard to scale.”

Why so? Here’s how Claudie Rubin, co-founder Mardi Agency, explained it to me:

“On Meta, organic reach from a creator’s main account can be unpredictable, which is why brands lean on partnership ads to scale - and end up paying both creator fees and media spend. That’s quite different from YouTube, where large creators can still guarantee significant organic reach and justify fixed integration fees.”

Given the lack of certainty on both sides, “That model will never work,” said Leopold.

In his view, a media buyer wants to spend a few hundred bucks to test whether a creator video will perform on Meta, while “creators are like ‘no, I get $10K for organic posts [on YouTube].”

Another challenge is simply the way that Meta thinks about advertising, where everything is a problem that an algorithm or AI can solve (the infamous Mark Zuckerberg Just Give Us a Check doctrine).

Ideally, Meta would like creators and brands, when working together on branded videos, to produce umpteen versions of said content in order to optimize performance (much like advertisers run and test out dozens, if not hundreds of Facebook ad creatives). That sort of flies in the face of creators’ value proposition - i.e. authenticity, and knowing their audience better than anyone.

“Meta is asking its agencies for unlimited creative variations,” said Conor McKenna, partner at Luma, who noted that some brands are working with hundreds of creators at a time to feed the Meta creator library.

“How do you take that creativity of the creators and put it into the monetization engine?”

It’s a big question - and one where the jury is still out, even as Meta ramps up to try to bring Reels to CTV, and take a bite out of YouTube’s ascendance.

“The big difference is that Meta success depends on [a creator’s] Meta stack,” noted Jamie Gutfreund, founder of Creator Vision. “How good your creative is, your account set up, if the algo knows your audience, etc. [On Reels], creator content is not primary – its constrained or limited by the overall account performance.”

To be sure, not everyone sees Meta’s push for partnerships ads as a negative - just something that is very different than YouTube.

As Rubin explained, as long as brands and creators can work together to optimize and “repackage” creator content on a variety of platforms - from YouTube to TikTok to Snap to Reels, all parties can achieve strong viewership. It just takes work

“Success depends on the signals from both the creator and the account – organic does not guarantee anything,” said Gutfreund. “[Meta] want you to pay for it , through targeting, lookalikes, to from the creators followers. It’s apples and oranges.”

It’s worth of course, pointing out the obvious here - that Meta is not exactly struggling on the ad front. And Reels, which only just launched a few years ago, has already stumbled into a $50 billion run rate. So the company may not care all that much how brands or creators view partnership ads.

But it has long been puzzling to see Meta sort of sit out the streaming boom, and feel like a lesser video advertising player. “We haven’t heard much from them [on that topic],” said Rubin.

Here’s how Jim Louderback, of Inside the Creator Economy, put it in his newsletter this week: “Meta still matters, but its hold on our attention seems to be waning as we move away from broad social feeds and into smaller, more private, trusted communities.”

Meta may soon come to find out that catering to creators requires a lot of human effort. And chasing TV dollars is a whole different sport.