Future of TV Briefing: Where YouTube stands in the 2024 streaming ad war

It’s a question I put to agency executives when reporting out this story on the 2024 streaming ad war. The answer, though, was – fittingly – a bit too nuanced to squeeze into a pithy paragraph. So here it is.

With the largest share of TV watch time among streaming services in the U.S., YouTube is too big to isolate from the broader TV and streaming ad market. But the breadth of its programming library and, particularly, its reticence to put a velvet rope around what it – and ad buyers – would consider premium quality content has hindered its position among agency executives.

“I am challenging myself, as my New Year’s resolution, to figure out how I classify [YouTube] to clients. Because if you look on a CTV scale chart, YouTube would blow everyone out of the water all day long,” said one agency executive.

A second agency executive actually did look at such a chart. “YouTube is by far the biggest reach driver out there. We did a chart the other day [comparing streaming services’ audience reach]. We actually had to shrink the numbers [because] the gap was so big on the reach,” said the second agency executive.

But the scale of YouTube’s platform also works against it. Yes, it now streams the most premium of TV programming through its NFL Sunday Ticket package, but that programming is only a slice of the four-plus billion videos that are estimated to have been uploaded to YouTube in 2023. And for as much as agency executives are trying to see YouTube as a top-tier streaming ad seller, they are having a hard time shaking their historical perceptions of the platform’s primary programming being user-generated content.

“There are still brand-safety concerns with YouTube. It’s not quite considered as safe as streaming or TV. You know what’s going to be on Peacock; you know what’s going to be on Paramount,” said a third agency executive.

“While some of [the content on YouTube] is really well produced, so much of it is UGC,” said a fourth agency executive. “Do I want to put it in the same bucket as Hulu, Netflix, Amazon, Paramount? I don’t because even the content and user experience is different. You have the tiles to select five-minute clips, seven-minute clips, 20-minute clips. You go to Amazon Prime [Video], to Netflix [and] you’re watching full one-hour episodes, highly produced.”

“YouTube still remains its own thing to a large degree based largely on the content differential. YouTube has a lot of user-generated quality content. They also have some user-generated less-quality content, whereas a lot of the other streaming services has more of that premium content,” said the second agency executive.

There’s YouTube’s primary problem in ad buyers’ minds – a secondary one being its unwillingness to allow non-Google-owned demand-side platforms to bid on its inventory – but also its potential solution. YouTube has the premium programming that ad buyers are looking for. The agency executives acknowledged as much.

“There’s a lot of content on YouTube that is professionally produced, or at least produced at a level that you could compare to some of the reality nonsense you see in traditional linear and cable,” said a fifth agency executive.

The issue is that YouTube has not marketed that professionally produced programming into a curated package for advertisers. There’s YouTube Select, which sifts the top 5% of channels on the platform. But that curation is done according to the quantity of people who watch those channels, not based on the quality of the channels’ videos. What agency executives want is a version of YouTube Select that accounts for both viewership quantity and content quality. Would YouTube ever do that, though? 

I put that question to YouTube’s chief business officer Mary Ellen Coe in a recent interview. She described the “debate about quality of content” as “a false paradigm” and pointed to Mr Beast as an example of a YouTube creator with a massive audience of viewers who don’t concern themselves with the content quality question. As it happens, some agency executives specifically cited Mr Beast’s videos as an example of the platform’s professional-quality programming that YouTube could curate into a premium package. As for a direct answer to the question, “that’s a no,” she said.

And so YouTube’s position in the streaming ad market seems unlikely to change in this next phase of the streaming ad war. “It’s almost in this, like, upper-right hand section of everybody else – or just its own separate line item to be honest,” said the fourth agency executive.

What we’ve heard

“Small handful.”

— The Wall Street Journal’s Josh Stinchcomb on the number of publishers, including WSJ, participating in LinkedIn’s new video amplification program

Numbers to know

130: Number of fewer original shows that Netflix aired in 2023 compared to 2022.

$4.8 billion: How much revenue Amazon Prime Video’s ad-supported tier is estimated to generate this year between video ad dollars and subscribers opting to pay extra for ad-free viewing.

11.9 million: Average number of viewers that tuned into Amazon’s “Thursday Night Football” broadcasts this past season.

$115 million: How much money ESPN will pay per year, on average, to air NCAA games.

64%: Percentage share of surveyed U.S. viewers who said they’d rather save money by watching ads than pay extra to avoid ads.

What we’ve covered

How Nationwide is navigating the short-form video boom:

• After launching its TikTok account last year, the insurance brand posts two to five times per week.
• More recently it has started testing videos on YouTube Shorts.

Read more about Nationwide here.

Linear TV has passed the point of no return:

• The TV ad business is eroding as streaming and other digital channels gain share of ad dollars.
• Linear TV companies’ streaming efforts are also having adverse effects on their traditional TV businesses.

Read more about linear TV here.

What influencer agencies are watching in 2024:

• Clients are more interested in running TV ads featuring influencers.
• Social commerce is also an area of growth.

Read more about influencer agencies here.

What we’re reading

Amazon poaches Hulu ad exec:

Ahead of Prime Video’s ads tier launch, the e-commerce giant has appointed Hulu/Disney ad veteran Jeremy Helfand to be Prime Video’s ad boss, according to Variety.

Amazon Freevee’s future is in flux:

With Prime Video’s ads tier in the wings, Amazon may no longer need its free, ad-supported streaming service and has started tapping Freevee employees to work on Prime Video, according to Insider.

GroupM looks to update ad formats:

The WPP-owned media agency has brought together the likes of Disney, NBCUniversal, Roku and YouTube to collaborate on developing new streaming ad formats, according to Axios.

VideoAmp hits a rough patch:

Last summer VideoAmp was riding high as Nielsen’s seemingly biggest threat, but last week the measurement firm’s CEO stepped down and the company laid off 20% of its employees, according to Ad Age.

Westbrook’s woes exemplify production company challenges:

Will Smith’s and Jada Pinkett Smith’s production company has laid off half of its employees and has yet to find a new home for “Red Table Talk” after Facebook opted not to renew the show, according to Semafor. After this article published, a spokesperson for Westbrook said that the company laid off 25% of its employees last year, not half as Semafor had reported.

TikTok ups its cut on Shop sellers:

The short-form video company plans to increase its commission from roughly 2% to 8% for most products sold through its e-commerce platform, according to The Information.