Consolidation in YouTube Advertising | PPC Hero

YouTube is the premier online destination for video consumption, but also an important piece of any advertiser’s strategy. The year-on-year growth rate of YouTube users between 2016 and 2021 was drastic. 2016 experienced a 13% growth rate, while in 2021, it amounted to 4.9%. This year, there are approximately 1.86 billion YouTube users worldwide, up from 1.47 billion in 2017. [1] From an advertiser’s perspective, the benefit here is that you have the reach and scalability met with the two additional and important factors listed below, which we will discuss in-depth during Day 1 of the conference.

1. Scalability & Reach
2. Audience Targeting, Platform, and Placement Diversity
3. Creative Impact and TrueView Skippable (Skip Button) bidding model

YouTube advertising delivers an immense amount of data with every impression as users have the ability to engage in a variety of ways. Thus, advertisers have a plethora of data to analyze. From video completion rates to filling out a form within the mobile app, YouTube remains the ultimate platform for all advertisers. One similar trait of YouTube to their top competitor Facebook is the impact and importance of creative. Getting the creative right is the most important variable. But when also married to keyword searches, specific channels or videos, and a multitude of other targeting tactics, there is a combination advertisers can’t and shouldn’t live without.

During The HeroConf 2022 presentation Jan/Feb I will segment and highlight the three most important components of the YouTube advertising platform:

1. Creative – Segmentation & Variation
2. Analytics – Analyze the data
3. Performance – Optimize & Improve

In this article, I will elaborate on creative tactics, strategies, and how a few new features could play an important role in the shifting of strategy. First and showcased below is a simple timeline for the most important bid strategy which would be TrueView (skippable). This type of video advertising I believe is, “the most valuable impression on the web” because you have unlimited ad length in combination with paying for the view. To be considered a view, a user must watch through the 30-second mark within a skippable ad. The goal and secret here are to get the user to forgo the skip button, but also stay long enough to be considered a view. Thus, optimizing your view rate (users who make it past thirty seconds divided by those who start the video, or impressions) is imperative to generate massive reach and scale.

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The image above highlights six important segments within the first 30 seconds of an ad, all of which are listed below. This diagram is best used as a template for testing how you can modulate the following components of video to drive the best view rate, and ultimately conversion rate.

• Hook (Attention) – Before the skip button becomes available at five seconds, give users a reason to stay. This is by far the most important part of the video to test and get it right.
• Engage (Audience) – We want advertisers to give users a reason to believe in this section. We’ve seen the product demonstration or founder face to camera work well here.
• Illustrate (Problem) – Self-explanatory, but showcasing the problem your brand/service solves can be extremely beneficial 15 seconds in.
• Establish (Brand) – Continue to brand in different ways. If your watermark or logo is shown on the ad from the start, try integrating the logo into visualizations of the product or product in-use.
• Qualify (Viewers) – Segment your audience to align with your video creative by showcasing various demographics, backgrounds, or other creative elements to help only the most qualified user make it past 30 seconds.
• Re-Hook – Similar to how you start the video focus on the thirty-second mark and what is going on as users close out this important time frame.

In addition to creative strategy, there is also a complex placement, ad, and bid-type strategy which can also be optimized for performance. Recent YouTube advertising changes are on the trajectory towards consolidation of creative assets with two new features (below).

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• Performance Max – Combines Google’s automation technologies across bidding, budget optimization, audiences, creatives, attribution by allowing performance advertisers to access all of their Google ad inventory, placements, and creative from a single campaign. [2]
• Video Reach Campaigns – Allows you to combine multiple ad lengths (Bumpers (5 sec.), Non-Skippable, and Skippable) within one campaign or target audience. [3]

The move towards consolidation has been a trend across many ad platforms with the goal of driving better performance. At Variable Media, we’ve seen how consolidation has hurt more than it has helped, in that it can drive higher costs to reach users. It also limits more granular data, which is key to understanding consumer purchase patterns and demographics.

Three important ad placements (below) which could be replaced by consolidation continue to be available. These three offer their own unique buying model on a CPM. From our experience in testing, we’ve found that non-skippable and bumpers drive the lowest volume of direct conversions, but indirectly impact reach and view-based conversions. While ad sequencing can be considered a unique type of retargeting that can drive a good ROAS dependent primarily on your creative, it can convert users in-stream. Thus, generating a much higher conversion rate once on site.

• Non-Skippable – These placements result in view rates of 90%+ in most cases and work best from a retargeting perspective when users already have some familiarity with the brand. For instance, those who have engaged with the channel or watched a video from the brand as well as visitors to the website. The key factor of non-skippable is in most cases is higher CPC (Cost Per Click) but a longer view rate. As such, the shorter form creative should be built on impression impact, not necessarily click-through engagement.
  • 15 Seconds (Interstitials in most cases)
  • 5 Seconds (Bumpers)
• Ad Sequencing – One of the rarest forms of retargeting, is a series of ads that can be optimized to the user’s engagement and intent (see image below). As you reach users who interact in specific ways, you begin to find higher conversion rates in most cases. This is not only a great way to test a video’s worth by what the user was exposed to previously, but also an amazing filter to find those who have stayed past 30 seconds.

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Hero Conference 2022 [4] in Austin this year is a must-attend. I am excited about the great speakers lined up for both days. There are so many fascinating topics from the best in the industry which we’ll learn during this time. In our YouTube advertising session, I will further elaborate on creative, adding in the two important categories (Analytics & Performance) to the YouTube ad-buying ecosystem.