Growing pains (not the sitcom) for YouTube’s ad business

Growing pains (not the sitcom) for YouTube’s ad business

I’ve been watching a lot of YouTube videos lately and I’ve noticed something – the ads are changing. I’ve noticed that many more of the pre-roll video ads no longer include a skip button. Luckily we’re talking no more than 15 seconds, but I’m not sure that forcing me to watch an ad does the advertiser any good.Then there’s the ad content. YouTube ads used to be all big brands, all the time; Purina dog food, Infiniti cars, the Dawn dishwashing liquid duck rescue.

Now, I see ads for smaller companies, websites and ads for other YouTube channels. It does appear that YouTube is making advertising easier and more affordable for everyone and it’s working. . . for the moment.

eMarketer says that YouTube accounts for 18.9% of the US digital video ad market. That equals $1.13 billion in revenue. Not too shabby. One problem, they aren’t living up to their full potential which means though the dollars will rise, the market share won’t in the coming years.What eMarketer points out is a problem anyone who watches YouTube regularly already knows – the ad delivery is inconsistent.

Sometimes the ads that show up are spot on for the target audience. But many times its an inappropriate match. I’ve seen trailers for R rated horror movies show up on Disney videos. I believe this is because the system is looking at me more than it’s looking at the subject matter. It’s still not a good match.

Sometimes it’s not the ad but the video itself that is the problem. There’s a lot of questionable and badly produced content on YouTube.

eMarketer says many advertisers prefer to invest in channels such as AOL and Yahoo where they know their ads will appear on well-produced, premium video content. They expect the spend to peak this year then growth will slow as more people move over to mobile and non-ad supported video sites such as Netflix and Amazon.

And then there’s Facebook.

Today’s rumor is that Facebook is courting YouTube’s biggest stars in hopes of getting them to come over to the F-side. Video views on Facebook grew over 50% between May and July of this year which was the start of a big push. Facebook also recently added public view counters to all videos to “help people discover popular videos, and help businesses quickly gather information about how their videos are performing.”

The downside of video on Facebook for me is the lack of a solid search engine.  I want people to be able to find and view my video a week from now, a month from now, not just an hour from now or however long it takes to fall off the feed.

Is Facebook going to knock YouTube off the video throne? No, but when you’re adding up the ad revenue, every little bit helps.

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