A Q&A with YouTube’s Mary Ellen Coe on the video platform’s big year
This editorial series examines industry trends across the media, media buying and marketing sectors as 2023 closes and the new year begins. More from the series →
With a business stretching from short-form video to traditional TV programming, YouTube presents something of a Rorschach test for the TV, streaming and video industry. That role can be best represented in two of the Google-owned video platform’s biggest moves in 2023: rolling out a revenue-sharing program for Shorts and carrying the NFL Sunday Ticket package.
In light of YouTube’s big year, Digiday spoke with YouTube chief business officer Mary Ellen Coe about how the platform’s business evolved in 2023 and what it has in store for 2024.
The transcript has been edited for length and clarity.
The two biggest moves, to my mind, that YouTube made this year were the roll-out of the Shorts revenue-sharing program and the launch of NFL Sunday Ticket. Which has had the more significant impact on YouTube’s business?
Both. The growth of short-form video is explosive growth. We are now upwards of 70 billion total views daily. A really great surface for monetization growth for creators. And the living room, that’s our fastest growing surface. 150 million viewers [on connected TV]. And Sunday Ticket is a very differentiated property. The NFL has a really loyal installed fan base. And one of the things we’re doing — and it was a really important strategic point of the deal — was the integration of our creators with the NFL content. And we wanted to really lean into Shorts. So featuring creator of the week or click through to live, so a game is featured in a Short and you can click through to the live feed. So they’re both really important on all three dimensions of the business and complementary.
You mentioned the importance of monetization for creators. With Shorts, how much money has been shared with creators so far?
Can’t give you total dollars on what is shared. I will tell you that it continues to grow monthly. It is an increasing percentage of our creators’ earnings. In our [YouTube Partner] program, we see Shorts earnings growing every month.
What percentage of YouTube advertisers are advertising on Shorts? And what’s YouTube doing to get more advertisers to adopt Shorts?
We are really pleased with the performance of Shorts from a revenue perspective. From a campaign type, we present a full-funnel opportunity to our advertisers. Whether it’s awareness or engagement or conversion to buy, we ultimately will talk to an advertiser about how do you use YouTube across the funnel, whether it be for a brand campaign or direct response. And Shorts is an integral part of that. We have three different campaign types for Shorts, and the brand campaign being the newest. So we really don’t go to market as an individual campaign type. We go to market with marketing objectives. And then Shorts play right into that. It’s a high conversion surface.
Earlier this year, Financial Times reported that YouTube executives have discussed the trend of creators uploading fewer long-form videos and the risk of Shorts cannibalizing long-form. Has there been an effect on long-form video revenue?
We’re actually seeing growth in both formats. We see users going to short- versus long-form for different occasions. I might go to long-form because I have a favorite creators who does long-form: Colin & Samir, as an example, or Mythical Morning. [Whereas] I might have a Shorts creator [like] Steven He — I just had a great opportunity to present him with his 10 million subscriber award — he has really taken off in the Shorts environment and then went over to long-form to create a feature film. So we’re really allowing creators to say, “What’s the best model for me to tell my story?” And we see both models really sustaining great monetization and business models for them. So we don’t take a point of view on what the best approach is.
Speaking of the very much long-form, Sunday Ticket. How many Sunday Ticket subscriptions have been sold so far?
We’re not publicly reporting that information. We’re really, really pleased with our year-one performance. We’re really pleased with the partnership with the NFL. If you’re watching all the user feedback, fans love the experience. People can’t stop talking about multiview. We put a lot of technical innovation into the product. You will see us continue to innovate the experience. And then we also really have focused on reliability [and] low latency. We feel great about the experience, and looking forward, it’s another big season ahead for us.
Speaking of the season ahead, this past year YouTube pitched Sunday Ticket to advertisers as a standalone offering. Looking ahead to next year’s upfront, will YouTube make any changes to how Sunday Ticket is packaged for advertisers?
We will continue as part of the premium package when we do the upfronts. And we’ll have the same inventory available.
You have Sunday Ticket, but NBA rights are coming up for auction. Will YouTube be bidding for NBA rights?
I don’t think anybody’s bidding right now. I think it’s a closed window. But honestly, we are 100% focused on Sunday Ticket right now. It’s available in Primetime Channels, which is our a la carte purchase opportunity for those who don’t want to buy into [a pay-TV] service and then it’s also available on YouTube TV, which is just having incredible growth with the inclusion of Sunday Ticket.
How many subscribers does YouTube TV have at this point?
Our last reported number is from June of 2022, and so the last publicly reported figure is 5 million. I think we’ll look forward to reporting new numbers soon.
Has it grown since then?
It is a really robust business.
Connected TV has been a growing source of viewership and has helped to raise YouTube’s standing among advertisers. What share of viewership does CTV currently represent? You mentioned the number of people watching on CTV, but what’s the share of viewership?
I don’t have a number for you. We don’t look at that. We look at the growth in living room, which is CTV, and it is our fastest growing surface because you get co-viewing, you get a leanback experience where you can get the full range of content from your favorite creator. Shorts is one of our fastest growing formats in the living room.
Just today, you all announced you’re going to reduce the number of ad breaks on CTV and extend the length of those breaks. What are the maximum number of breaks and then the length of those breaks going forward?
I don’t have that information available to me, and I don’t know that that’s going to be publicly reported. Ultimately our general principle is we really want to make sure that the user has a quality viewing experience. And so we engage very carefully in studies to look at timing of ad breaks, ad load, the placing of ad breaks to make sure that we are best-in-class from a viewing experience.
In preparation for this interview, I reached out to a number of agency executives to get a sense of where YouTube fits in their stacks at the moment. What they said is they continue to see YouTube as separate from the premium tier of the streaming ad market — Hulu, Netflix, Peacock and the like — and the major reason for that remains the user-generated content on the platform. One agency executive said YouTube’s position would be helped if it started to make a delineation around its premium content. Their point was that YouTube Select only quantifies top channels based on viewership, and they’d like to see YouTube segment channels based on what it considers professionally-produced content, with examples like Mr Beast and MKBHD. Would YouTube consider creating a premium tier of channels, based on video production quality, to package for advertisers?
I come out of the ads business. I’ve spent years with chief marketing officers. And what they will continuously tell you is what’s important is audience and performance, return on ad spend and growth. When you look at living room, at Shorts, it’s up and to the right. So the debate about quality of content I almost think is a false paradigm. Mr Beast as an example, he’s the first creator to a billionaire in terms of valuation as Fortune reports. He commands the audience of a top 10 Netflix show. And he’s one of dozens of creators I can name that ultimately, when we see what the audience is engaging in, I don’t think they’re seeing the same delineation that the feedback you’re getting from agencies.
So that’s a no?
That’s a no.
Another thing the agency executives would like to see from YouTube is for YouTube to open up its inventory to non-Google demand-side platforms. Any plans for that? And if not, why not?
We feel really great about the quality of our sales organization and the ability to represent YouTube, the unique ability to address the full-funnel buying objectives, really understanding the value proposition and what makes our creators so special. So no plans to address that.
I’ve been told by agency executives that YouTube has pushed back its co-viewing measurement plan to the fourth quarter of 2024. Why was that decision made?
I cannot speak to the roadmap. I have colleagues who lead measurement and attribution. I couldn’t venture to speak on that. But we do know it’s a really, really important benefit of our living room experience. So it’s an important priority to us.
And then the Adalytics reports. Talking with the agency executives, that seems to have had no impact on client investment or interest, at least for the agency executives I spoke to. That being said, has YouTube made any changes to its advertising practices in light of those reports?
We published a blog post on this. I think you’re probably familiar with that. And we stand by the quality and the performance of our ad systems. So no additional comment from the blog post.
Somewhat of a minor change, but at the same time, talking with some creators and channels, a significant change for them was YouTube’s decision to remove the option for channels to manage the types of inventory in their videos. Why was that decision made?
We have a lot of different inventory surfaces. As we move into campaign types, like Performance Max, that will use different inventory sources, the sophistication required on that front was really impacting — we got a lot of creator feedback that it was confusing. It wasn’t optimizing their monetization from their experience on the platform. And we found that if we ultimately released that as a constraint, they could make more money and ultimately have a simpler and more intuitive experience. In fact, we have data to say that ultimately that’s going to improve creator earnings.
Will there be any exceptions to that? For example, video podcasts has been a growing content category on YouTube, and I feel like that’s one area in which creators having control over ad breaks can be more advantageous so that a guest isn’t interrupted mid-sentence with an ad.
So you can control, say, mid-roll, for example. What you cannot do is say, “I want a 30-second non-skippable [ad].” So think of it as format type, not placement.
Looking ahead to 2024, what’s YouTube’s top priority on the business side for the year?
You started with Shorts and the living room, which are really important pillars of growth for us. Underlying all of that, you’re probably aware Google is spending an incredible amount of investment on generative AI and incorporating that into our platform and our launches.
For example, Aloud [an AI-generated voice dubbing tool to translate creators’ videos into other languages] has been in beta. The average creator, when they use Aloud, gets 15% more audience views from different markets around the world in other languages. Dream Screen is another great example. You can do text-to-image application of AI and render an incredible background for your video. So you’ll see us doing a lot more launches that really allow our creators to make more compelling content and broaden the access to creators. And you’ll see that feature very prominently in Shorts.
From a living room, perspective, you’ll see us leaning into continuing to support long-form creators and ensuring that we’re spending a lot of time looking at creators spending time doing more 4K production video, et cetera. Really high quality living room content and applying features for NFL Sunday Ticket et cetera, like shopping. I know there’s a lot wrapped up in there, but those are a few of the top opportunities.
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