I attended the annual YouTube NewFront event at Google’s Pier 57 in New York City this year.
At the occasion, back in May, I’d come to the event expecting to glean insights into YouTube’s strategic orientation. However, the majority of the discourse – save for a few notable exceptions – revolved around tactical deliberations, creating an impression that YouTube is akin to TikTok.
Nevertheless, I was too hasty in my assessment. Eventually, YouTube unveiled its strategic trajectory across three pivotal gatherings: NewFront, Brandcast, and VidCon Anaheim.
This article serves as a synopsis of my observations from these events, spotlighting the multi-faceted strategy that YouTube is delineating.
The first event was YouTube NewFront, which I’ve already covered in “YouTube NewFront 2023 Showcased Shorts To Reach Gen Z.”
And indeed, YouTube underscored that “YouTube Shorts is now averaging more than 50 billion daily views.” At this initial event, it also revealed that out of YouTube’s billions of monthly logged-in viewers, 1.5 billion are engaging with Shorts.
Google then revised this figure during Alphabet’s Q2 2023 financial results, announcing that over 2 billion logged-in users are now consuming YouTube Shorts monthly.
This gives the short-form segment of the social video platform a competitive advantage over rivals like TikTok and Instagram Reels.
Now, Shorts is just one among several formats on YouTube, alongside long-form content, live streams, and podcasts.
Yet, according to Tubular Labs data, 14.4 million accounts uploaded 353 million videos to YouTube from Aug. 1, 2019, to July 31, 2020. These videos garnered 12.2 trillion views and 213 billion engagements (e.g., likes, comments, and shares), resulting in an engagement rate of 1.7%.
Within this figure, 4.5 million accounts uploaded 42.8 million videos that lasted 60 seconds or less. This short-form content amassed 850 billion views and 11.0 billion engagements, yielding an engagement rate of 1.1%.
This was before YouTube introduced the beta version of Shorts in India on Sept. 14, 2020, rolled it out in the US on March 18, 2021, and subsequently made it available worldwide in July 2021.
In comparison, 23.1 million accounts uploaded 732 million videos to YouTube from Aug. 1, 2022, to July 31, 2023. These videos amassed 22.9 trillion views and 734 billion engagements, resulting in an engagement rate of 3.2%.
Within this total, 16.5 million accounts uploaded 362 million videos lasting 60 seconds or less. This short-form content garnered 16.6 trillion views and 580 billion engagements, resulting in an engagement rate of 3.4%.
This marks a significant transformation in the strategic landscape.
Over the past three years, the number of YouTube creators, videos, total views, and engagements have all witnessed a remarkable surge. Moreover, their engagement rate has seen a substantial improvement, with Shorts playing a pivotal role in YouTube’s overall success.
Therefore, I am chagrined that I initially brushed off the focus on YouTube Shorts as “a tactical conversation.”
Looking back, my reaction was triggered by the second key message of the NewFront event: “Gen Z and YouTube go way back.”
Indeed, one way to segment audiences is through generational or age cohort categorizations. And it’s true, the demographic born after 1996 is referred to as Generation Z, or Gen Z.
But as Michael Dimock, the president of Pew Research Center, wrote recently,
“It’s hard not to run into eye-catching headlines about generations these days. And it’s easy to feel like many of these headlines are just clickbait, all fluff, and no substance.”
He listed five important considerations to keep in mind whenever you come across a news story or research about generations. This includes:
1. The boundaries between generations “are not precise, definitive or universally agreed on.”
2. All members of Gen Z, Millennials, or Baby Boomers are not the same, “just as all Southerners, all Catholics, or all Black Americans are not the same.”
3. News stories and research about generations often focus on “differences instead of similarities.”
4. Conventional wisdom about generations can have “an upper-class bias.”
5. People can and do change “as they grow older, pursue careers, and form families.”
When I characterized the strategy of leveraging Shorts to connect with Gen Z as “a tactical conversation,” I might have mixed up my considerations regarding producing short-form content with my sentiments about appealing to a demographic significantly younger than Boomers like myself, and even younger than my own children, who belong to the Millennial generation.
Hopefully, I’ve now clarified all this.
YouTube Brandcast 2023
The second gathering was Brandcast, YouTube’s 12th annual exhibition for advertisers, held on May 17, 2023, at Lincoln Center’s David Geffen Hall in New York City.
YouTube’s newly appointed executive team – comprising CEO Neal Mohan, Chief Business Officer Mary Ellen Coe, and Google President Sean Downey – made their debut on stage, discussing their vision, content, and client achievements.
As Brandcast was part of the Upfronts, YouTube delved into a topic that received only passing mention at its NewFront event a few weeks earlier: connected TV (CTV).
Among the things that YouTube told advertisers who attended Brandcast were:
1. YouTube is the leader in streaming watch time, ahead of Netflix, according to Nielsen’s total TV and streaming report for the US in December 2022.
2. YouTube reached over 150 million people on connected TVs in the United States, according to Nielsen data.
3. YouTube CTV accounts for over 52% of ad-supported streaming watch time on connected TVs among people aged 18+, according to data from Nielsen SPR.
4. Over 30% of YouTube viewers in the US aged P18+ could not be reached by other ad-supported streaming services in October 2022, according to data from Nielsen NMI.
5. Over 70% of YouTube Select campaign impressions landed on TV Screens in the US in December 2022, according to YouTube internal data.
Earlier this year, YouTube declared its new alliance with NFL Sunday Ticket, positioning itself as the premier destination for football enthusiasts.
During Brandcast, Coe elaborated on YouTube's collaboration with NFL Sunday Ticket and the distinctive opportunities it offers fans to engage with sports content on YouTube and YouTube TV.
Within YouTube's partnership with the NFL, Coe highlighted the expansion of original programming, such as Game Day All Access, which allows viewers to eavesdrop on mic'd up players on the sidelines during games.
Furthermore, she unveiled the launch of "NFL Creator of the Week," a fresh original Shorts series on the NFL's YouTube channel set to debut after the football season kicks off this year.
This implies that advertisers can connect with football aficionados across YouTube's entire spectrum of NFL content, whether they're tuning in to live games on YouTube TV and Primetime Channels or consuming highlights, post-game analysis, and related content on YouTube.
To illustrate the potential of this partnership, Brandcast featured Roger Goodell, the Commissioner of the National Football League (NFL), and Donald De La Haye Jr., known online as Deestroying, collaborating to showcase the essence of football culture on YouTube – and how brands can capitalize on it.
For instance, Goodell disclosed that NFL content on YouTube witnessed a 27% surge in watch time year-over-year, accumulating 1.9 billion views.
Since then, it has been revealed that CTV advertising expenditure on YouTube outpaced its streaming competitors in Q2 2023, according to Tinuiti.
Additionally, Insider Intelligence, formerly known as eMarketer, now projects that YouTube will generate $2.89 billion in US CTV ad revenue this year, ranking second only to Hulu.
Hence, YouTube's rivals on this front are Netflix and Hulu, rather than TikTok and Instagram.
And Daniel Konstantinovic of Insider Intelligence said on July 28, 2023,
“YouTube’s strong TV viewership and content model gives it an advantage over streaming services and other CTV platforms just entering the fray.”
VidCon Anaheim 2023
The third installment in this trilogy was VidCon Anaheim, held from June 21 to 24, 2023, at the Anaheim Convention Center, with YouTube as the title sponsor and exclusive livestream sponsor.
During the industry keynote, Amjad Hanif, YouTube’s Vice President of Product Management, engaged in a discussion about YouTube and the creator landscape with Amber Scholl, Colin and Samir, LARRAY, and SSSniperWolf, prominent breakthrough creators of today.
The key highlight of this event is YouTube's remarkable payout of $50 billion to creators, artists, and media companies over the past three years.
Why is this significant? It furnishes YouTube with a strategic edge over both its social video counterparts and streaming TV competitors in attracting and retaining creators.
According to Oxford Economics, YouTube’s creator ecosystem sustained over 390,000 full-time equivalent jobs and contributed more than $35 billion to the US GDP in 2022 alone.
It's noteworthy that YouTube didn’t commence revenue-sharing for YouTube Shorts until Feb. 1, 2023. This new revenue-sharing model replaced the YouTube Shorts Fund.
Thus, creators in the YouTube Partners Program have only been able to monetize ads viewed between videos in the Shorts feed for six months. Depending on various factors like content and audience demographics, YouTube compensates creators up to $3 per 1,000 views for the Shorts feature.
Previously, from 2021 to 2022, only a select few creators could earn anywhere from $100 to $10,000 monthly from the YouTube Shorts Fund. Now, the earning potential is limitless.
This confers upon YouTube a substantial strategic advantage over TikTok and Instagram, as well as Netflix and Hulu, in attracting and retaining not just the top creators, but also a vast array of creators.
But that’s not all!
In the week leading up to VidCon Anaheim, Hanif unveiled additional avenues for creators to monetize on YouTube, ranging from fan funding to shopping.
YouTube has broadened access to fan funding features such as channel memberships, Super Chat, and Super Thanks.
Furthermore, YouTube has introduced an update to the platform’s Shopping affiliate program for creators.
In a post on the YouTube Official Blog, Hanif said,
“In the US, the number of channels that earned a majority of revenue from Fan Funding products in December 2022 saw an increase over 20% compared to the prior year.”
Hanif added, “We’re expanding our YouTube Shopping affiliate program to all eligible US-based creators who are in (the YouTube Partner Program) with over 20,000 subscribers.”
The revamped Shopping affiliate program will empower creators to showcase products from various brands within their content, granting them eligibility for attractive commission rates on the sales of these items.
YouTube has established partnerships with more than 50 brands including Nordstrom, Sephora, Ulta Beauty, and Wayfair. Their diverse array of products, spanning categories like beauty, technology, home, and apparel, can now be seamlessly featured and tagged in videos and Shorts.
Takeaway
After a two-month journey and three significant events, YouTube has finally unveiled its strategic trajectory. It's a multifaceted vision that renders my prior grievances quite embarrassing.
YouTube isn't merely endeavoring to emulate TikTok's triumph.
Instead, the company is pursuing a versatile strategy aimed at outpacing its rivals, with a focus on short-form video, connected TV, and bolstering the creator economy.
And thus far, it appears to be yielding positive results.
Therefore, I must acknowledge my errors with sincerity and remorse: mea culpa, mea culpa, mea maxima culpa.
Disclaimer: All statistics not linked are from a gated Tubular Labs report.
