YouTube: The Rise And Fall Of a Platform

The incredible digitization of entertainment that we have faced in the last 15 years has led the new generations to replace traditional media with other platforms.

The latest to be affected by this phenomenon are those dedicated to streaming.

With over 2 billion active users per hour, after almost 10 years of unchallenged hegemony and being bought by Google, YouTube now faces much younger competition with different business models: Tiktok and Twitch.

These platforms intercept a target audience different from that of the Google site, revealing an interesting territory in which brands can invest to get in touch with an audience different from that of the “classic” social networks. 

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It is clear, however, that it is not only the target that differentiates itself but also the ways to get in touch with the public and advertise. In this article, we will start with Youtube and Google Ads.

Google Ads: How do advertising spaces work on YouTube?

Youtube ads are managed through Google Ads.

It is an application through which Google makes advertising space available to investors.

It is divided into two sectors:

Google AdSense

is the part of the platform where Google partners make their advertising spaces available. The latter are processed by the Google algorithm and published in spaces that have a good affinity with the product offered. Partners, therefore, earn on clicks to advertisements but also from exposures, defined as “impressions,” which refer to the cost model CPM (cost per thousand). In this way, the payment only takes place after 1000 views of the ad.

Google Adwords

allows an investor to advertise through the Google network, i.e., on all sites owned and affiliated with Big G. This has two branches to allow for better division of the placements in which to publish ads: the search networks and the display.

Suppose the investor decides to use the search networks. In that case, his ads will appear among the first results on Google in response to user searches and, based on the keywords entered in the advertising definition phase, paying a certain amount for each click received sum.

If the investor instead decides to use display networks, the situation is a little different.

The display networks include more than a million sites and applications for smartphones, managing to reach over 90% of Google users.

The goal of display networks is to intercept a certain user by offering them services and/or products they don’t know they want.

The Mountain View algorithm processes the keys entered, and the advertisements will be seen by a specific target interested in topics similar to those of the offer, avoiding proposing the product to an uninterested public in purchasing.

This occurs on Google-affiliated sites, i.e., sites that meet all image criteria imposed by the company through the use of banners and screen advertising.

It is precisely this type of ad that is implemented on Youtube.

A content creator who passes the standards to become a “Youtube partner” signs a partnership agreement (i.e., he is not a Google employee and, as such, does not enjoy the same rights as a worker) through which advertising spaces are implemented inside the videos.

Based on the CPM cost model, the content creator earns a certain gross amount for every 1000 ad views. The sum is subsequently divided with Youtube into percentages based on the country’s tax regime in which the creator operates.

2017: the beginning of the decline

In February 2017, Youtube faced a crisis in its advertising model.

It all began when the Wall Street Journal published an article on the breakup of the relationship between Pewdiepie, the YouTuber with the most subscribers in the world, and Disney.

The responsibilities for the break were attributable to the controversial irony, accused of anti-Semitism, present in the last video published at the time by the Swedish creator.

The story attracted the attention of investors who took note of the presence of controversial content on the platform, often associated with advertising from various brands.

A protest was triggered: companies not content with being associated with controversial content withdrew their advertisements from Youtube. They demanded that we eliminate any kind of content, even remotely controversial, or at least avoid its promotion.

Youtube and Google chose to endorse these requests, sparking a crisis that silently continues today.

The new algorithm and demonetization: the Ad-apocalypse

Google and YouTube chose to change the video selection algorithm, differentiating between so-called friendly content and controversial content.

The algorithm automatically analyzes the videos based on certain factors (use of certain words in the video, in the thumbs, and in the tags) and eventually can automatically insert them in the restricted mode, an unprecedented category with contents that can be monetized.

The problem is the total lack of contextualization of the exclusion from monetization. Millions of videos, which often dealt with controversial topics for dissemination purposes (historical, geopolitical, philosophical, etc.), were “demonetized” and automatically penalized.

This resulted in a sharp decrease in the income of creators on the platform, who looked for new ways to earn, often resorting to third-party platforms such as Patreon.

But Youtube also had serious economic repercussions: the contents considered controversial, in fact, correspond to those that generate the highest revenue.

The so-called “Ad-apocalypse” and the new algorithm have profoundly changed Youtube.

The platform has opened up to a generalist target, losing a huge slice of the public – in particular, users between 16 and 35 years old.

So it was that creator and audience looked for a new place to share passions and topics banned from Youtube.

This moment coincided with the full maturation of Twitch, which we have already covered.

A look towards the future

In a world where hegemony and the IT monopoly are in the hands of an increasingly criticized Google, facing its applications is a real act of courage, especially when you want to face them in the technical field.

It is clear that to reach a general audience; it is necessary to remember that dealing with Google and such pervasive and intrusive Ads is necessary – if not inevitable.

At the same time, extensive exposure to this type of advertising could make the public addicted and inattentive to the products offered.

The different models presented by platforms such as Twitch or TikTok attract the public’s attention differently.

The product is proposed by influencers within a context with similar themes in a discourse that makes it interesting, if not necessary, to participate in the comparison actively.

The discussion on the product and the product, therefore, is very effective if proposed in the right contexts to the right targets, making these social networks more suited to specific and non-generalist products and audiences.

Consequently, comparing social networks such as YouTube and Twitch does not make much sense.

They may seem like two platforms that are very close together, but they have very different catchment areas and targets.

Their advertising models, therefore, are very distant, and both have a very good effect on their audience.

Also Read : Display Advertising: The Advantages Of Web Promotion