YouTube Premium and Advertising: Is it Time to Work More with Content Creators?

Bayan Ishtaiwi, digital media manager at Vizeum, discusses YouTube Premium and what it means for marketeers.

Anyone who utilized YouTube as a media channel will probably know that it can be one of the most impactful channels to boost brand awareness and ad recall; not only that, but also driving conversions if you are leveraging YouTube for action! The platform provides full-fledged solutions to target users, no matter where they are in the marketing funnel.

YouTube has a strong presence in MENA with over 18 million users in KSA, over seven million in the UAE and over 2.5 million in Kuwait.
More than 300 million videos are viewed per day.

With that being said, we can see why most brands are present on YouTube: to capture this great opportunity of reaching the right audience and deliver the right message!

But… Would that still be possible with the launch of YouTube Premium?

What is YouTube premium?

YouTube Premium is a service by YouTube that allows users to benefit from diverse features by paying a subscription fee. Those additional features include:

Enjoying an ad-free experience.
Background play that allows users to listen to audio while the app is minimized.
Having access to YouTube originals: exclusive series available for premium users.
Offline access: being able to download videos to watch offline.

YouTube Premium was launched in MENA (UAE, Saudi Arabia, Bahrain, Kuwait, Oman and Lebanon) in September 2019, bringing the number of markets enjoying the services to over 70.

With YouTube changing to a subscription-based business model and aggressively pushing heaving consumers to convert, lots of users will be enjoying an ad-free experience very soon! So how would this affect advertising on YouTube?

What does it mean for advertisers?

Users will still be using YouTube, but they won’t be targeted with ads! Which means:

Less available audience size and less reach.
If heavy consumers are no longer available, we are left with users who use the platform less frequently (fewer videos played, less watch time) which means less inventory and ad placements.
With less ad placement/ inventory, expect the prices to be more competitive.
Less frequency of usage for non-heavy users (if we assume that heavy consumers watch 3h/day, light consumers might watch 2h/ week) will affect campaign duration as you will need more time to reach your audience.
For brands that are trying to sell additional features for a fee, they might have just lost users who are willing to pay more for convenience or additional services.

While those are all assumptions, let’s have a look at a typical YouTube reach curve for KSA for reach objective and skippable ads format (this is a hypothetical scenario just to explain the logic behind my assumptions):

Looking at a two months duration campaign, you can reach 70% of the Saudi audience (mass targeting) by investing $283,000, while if you want to increase your reach by 5 points, you need to increase your investment by 29%. Is that still worth it for you?

My concern is that, if the heavy YT users are moving to YT Premium, you are already starting your campaign with an audience that is harder to reach and consumes less content which will result in… less efficient reach!

So, what can we do?

This of course doesn’t mean that brands and advertisers will stop using YT. There are so many tactics that can be used to stay efficient and reach your audience:

Consider working more with content creators to produce branded content instead of sticking only to pre-rolls and mid-rolls.
Use planning tools to know the amount you need to invest while still being efficient and knowing when to stop.
Start looking at day of the week performance and schedule your ads on the days that will drive efficiency.
Choose your campaign duration carefully and manage expectations.
Know your objective and keep optimizing until you achieve your goal!
Consider adding other channels when targeting users who are willing to pay for a service.

What else would you do?

Opinions expressed in this piece belong to the author.