YouTube’s New Advertising Strategies
YouTube (GOOGL) is making two significant changes to its advertising strategy. The video platform generated $5 billion in advertising revenue last quarter and the changes will likely boost its advertising profits even higher.
YouTube plans to place more ads on videos with small viewership numbers. However, it will not pay these creators—a decision which has sparked debate in the YouTuber community. The company is also rolling out audio ads to target consumers who use the platform to play music and podcasts.
Placing Ads on Content With Less Viewership
Starting yesterday, YouTube began placing ads on more videos made by content creators with small viewership numbers. Until now, most YouTube ads were placed on videos created by people participating in YouTube’s Partner Program. To participate in this program and be paid by YouTube, a content creator must have over 1,000 subscribers and have accrued more than 4,000 total hours of watch time over the past 12 months.
YouTube pays creators who are part of the Partner Program, but it does not pay smaller YouTubers, and it does not plan to do so even as it incorporates more ads into these videos by less high-profile YouTubers. This strategy will give YouTube more space for advertising at no cost to the company.
Launching Audio Ads
Many consumers use YouTube not just to watch video content but to play music and podcasts ambiently. Now the company is developing an advertising strategy for these situations in order to compete with Spotify (SPOT), Apple Music (AAPL), and other music streaming services for audio ad dollars.
The company is offering 15-second audio ads as well as opportunities for advertisers to target consumers based on what people are listening to. For example, a running shoe company could place ads on a workout playlist, or a toy company could place ads on a children’s music playlist.
Youtube is likely to see high traffic this winter as people look for ways to entertain themselves at home. This trend combined with the company’s new advertising strategies could give YouTube’s ad revenue a massive boost.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.