With digital ad spend continuously on the rise, it comes as no surprise YouTube has caught a sizeable piece of the pie. Ad intelligence platform MediaRadar unveiled Wednesday $482 million was spent on YouTube video ads in the first quarter – up 57% from $307 million in Q4 2021.
MediaRadar analyzed a sampling of online video advertising using data from YouTube and traditional websites. The data includes pre-roll, mid-roll and post-roll ads and was collected from a panel of more than 2 million U.S. consumers. The study did not include ad data from streaming video platforms or social media.
The decision to exclude those platforms, MediaRadar Founder and CEO Todd Krizelman told Fierce Video, was made to see how YouTube stacks up against companies trying to sell video outside the streaming and social realms.
“When you put Facebook, Instagram and Twitter in there, it basically crowds it out so much and just looks like a battle between a handful of companies,” he said, noting even YouTube alone seems to overpower MediaRadar’s results.
MediaRadar’s “Other Video” category, Krizelman pointed out, consists of dot-com websites like Yahoo, CNN or ESPN. Essentially, any website that has video functionality but isn’t an OTT or social media platform.
While YouTube ad spend increased sequentially, video spend without YouTube went down from $142 million to $63 million – a 56% decrease – in the same period.
Combined spending for YouTube and online video, on the other hand, rose 31% quarter-on-quarter. Online video ad spend in Q1 totaled to $5.5 billion, up from $4.2 billion in Q4 2021.
How platform flexibility affects ad times
The report went on to highlight the duration of YouTube ads compared to those of other video websites. Non-YouTube video platforms are leaning towards shorter ads. In fact, ads that are 30 seconds or less make up 98% of other video ads.
While YouTube also seems to prefer ads with shorter timeframes, the platform had 11% of Q1 ads run from 31 to 60 seconds, and 6% of YouTube ads ran longer than a minute.
Krizelman thinks there’s more variety in YouTube ad durations because YouTube’s technology permits more flexibility for advertisers. Whereas other websites may have systems that can’t run ads greater than 15 or 30 seconds.
“At YouTube they control the platform, they are the technology provider for their own services,” he said. “If someone wants to run a two-minute ad versus a minute [and 17 seconds] ad, they can allow anything.”
YouTube is making it easier for marketers to integrate ads onto its platform. Comcast’s FreeWheel recently expanded its relationship with YouTube, adding components like automated video ad insertion and improved customer workflows between the two systems.
MediaRadar also looked at ad placement during Q1, finding most ads from other online video platforms (97%) were pre-roll ads – those that play before the content begins. But YouTube saw a more balanced mix of pre-roll (30%), mid-roll (28%) and post-roll (42%) ads.
The higher amount of mid-roll and post-roll ads goes back to YouTube having more flexible options for ad inventory, Krizelman said. And as YouTube has a bigger percentage of longer ads than other websites, advertisers tend to place those ads in the middle of or after a video.
Regarding post-roll ads, Krizelman noted advertisers can only gain revenue from those ads if people actually watch them. So MediaRadar’s percentage of post-roll ads doesn’t take into account viewers who closed out of a video before the ad ran, for example.
“This is not a scenario where someone starts watching the video and leaves, and there’s still a post-roll that gets billed back to the customer,” he said. “That doesn’t happen.”
Differentiating ad revenue between YouTube and other online video platforms can be tricky, in that other websites may have the option to embed videos via YouTube. But Krizelman said that revenue would usually go to the website owner, not YouTube.
“Even though they’re using a YouTube frame inside the website, we’ll still assign it to you, the website owner,” he said.
Ad spend trends
Looking ahead in the advertising landscape, Krizelman thinks the rise of short-form content, driven by platforms like TikTok, will have an impact on ad duration times.
“The consumer always wants short ads, and the advertiser wants longer ads because longer ads (if watched) make a bigger impression on people,” he said. “One of the questions is: will YouTube be pulled towards shorter ads? And if that happens, do they collect less revenue?”
Krizelman also said he’s noticed a shift of more ad dollars going towards retail. Amazon said its advertising business made $31 billion last year, and other companies are eager to get into the retail action. Roku, for instance, launched last week a shoppable ad pilot program in partnership with Walmart.