YouTube is Winning the Streaming Wars - What About the Algo-War?

Can you take on Netflix and TikTok at the same time?

For all the hype thrown at Netflix’s massive subscriber growth and sports rights incursion, YouTube is quietly running away with the streaming wars.

Which is simply an amazing shift in the media landscape. Yet…

At the same time, is YouTube missing an opportunity to go after a clearly-wounded, potentially-on-death-row TikTok? Is it worth fighting both battles? Is it possible?

Those are some of the questions I had this morning as I read more TikTok stay of execution headlines, while the latest edition of Nielsen’s The Gauge streaming report hit my inbox.

As you can see - despite a massive month of live sports (including tons of NFL) which surely boosted Amazon and Netflix’s streaming share, YouTube jumped 7% in December, push its share past 11.1%, of all TV viewing, per Nielsen.

Not only is YouTube’s CTV viewership surging, but it’s winning on the ad targeting front versus the more established TV players, said Ross Benes, senior analyst at eMarketer on my podcast this week.

“I think brands are trying to target on some of these streaming services, but when I watch any of the FAST services I just see the same ads in the same pod,” he said. “But on YouTube, you really start to see some like things based off my search history. They're the ones who do it the best.”

This streaming growth, coupled with ad targeting prowess, are both great things for YouTube. But could they also be a hindrance?

Consider that YouTube has spent the past several years both trying to win the battle for the TV set (and the TV ad budgets) while also trying to match, or at least blunt TikTok.

And YouTube Shorts has certainly taken off; Google says the product generates 70 billion views a day. While YouTube hasn’t dented TikTok’s growth - it’s clearly demonstrated that it can compete in short-form.

So here’s a few questions:

• When TikTok went down briefly over the weekend, why didn’t YouTube roll out a standalone YouTube Shorts app? Is this in the works for if-and-when TikTok gets officially banned in the US? You would think YouTube wouldn’t want to let other algorithm-driven apps like Lemon or Rednote grab displaced TikTok users. Yet at the same time, you could argue whether a new separate app is a smart strategy, or one that might risk diluting the current YouTube product.

• With TikTok in jeopardy, Why isn’t YouTube going after TikTok Shopping/social shopping in a more aggressive way? As Underscore Talent co-founder Reza Izad mentioned to me the other day on my Next in Creator Media podcast, YouTube’s shopping capabilities aren’t as good as they could be. “I don't know that YouTube is set up yet anyway to pick up a lot of that {social shopping audience}.”

One of the reasons that YouTube may not be moving more aggressively to try and bury TikTok when it’s down is that Shorts may not be viewed as lucrative over the long haul - and could actually be in conflict with the strength and equity YouTube has built among brands in the connected TV/creators sector.

I’m basing that theory on conversations I had recently with several top buyers about this in a recent video - as part of my multipart series with Pixability.

“We think there can be a lot of power in Shorts because again if it's content that our customers love and they spend a lot of time with,” said Shelby Saville, CEO of Starcom US. Yet “getting an ad message in there is difficult….The consumer is cycling through content really quickly, and you're interrupting that very fast cycle… I think there's not always enough research around the mentality of the behavior and how receptive people are to an ad message.”

Plus, as Joel Cox, Co-Founder and EVP of Innovation at Strategus added, there’s a reason that YouTube on connected TV is commanding ad rates that are comparable to television. “We’re buying YouTube for that time spent,” he said. The value of Shorts is “just too debatable.”

Which is probably why this strategy is so debatable for YouTube. Is it worth battling TikTok when the revenue benefits are less certain (that’s not to say that TikTok hasn’t been a lucrative U.S. ad business)? It’s not easy to tell the ad community two or three big stories at once.

That said, how crucial is it for YouTube to compete on the macro-time spent battle - knowing that consumers - for the foreseeable future, are going to want to binge shows, and watch creators on TV, and zone out to algorithm-driven feeds on their phones?

Can YouTube win on all fronts? Should it try?

The Agency View on IDs, Targeting, the Future of Measurement

As part of my ongoing initiative with Epsilon (which has been a fantastic partnership to date), I sat down with Brad Piggott, Epsilon’s Senior Vice President - Client Development at CES.

Among the conversation’s highlights for me was the idea that for all the efforts in the ad industry toward coming up with a new set of metrics or common identifier to grapple with post-cookie life, big agencies - given their own investments in data and tech, are going to do things their own way.

“Our identifier is the core ID, which allows us to speak directly to a person,” he said. “You’ve got a number of players out there with identifiers. Some are good, some are not so good. But the idea of ‘one ring to rule them all’ is very challenging. If you start digging deeper, and peeling back the onion, it becomes, ‘what types of data is making up that identifier?’ If it’s one or two, that’s going to be subpar.”