Google’s large and growing video presence via YouTube, particularly in the living room, continues to attract advertising agency investment, but the nature of its evolving platform means how to categorize and handle in marketing strategy is becoming a bit more of a puzzle as it doesn’t fit neatly into one bucket.
There is a running debate among some in the industry as to whether YouTube, with its massive library of user-generated content, can be classified in the same category as “TV”.
Google-owned YouTube has made CTV a strategic focus, introducing new CTV-specific features and capabilities for the platform, like non-skippable ads. Still, one camp might subscribe to the view that video needs to be premium production-quality, long-form content to be considered “TV”. YouTube, to be sure, has some higher production-quality videos and long-form content but a lot of it is still user-generated and not likely to fall into the “premium” category. But quality can be in the eye of the beholder and the emergence of generative AI tools stand to potentially further aid creators in content efforts.
And regardless of whether YouTube is considered “TV,” there’s no question that consumers continue to turn to the platform with robust consumption, including increasingly on their CTV devices – meaning an important channel for advertisers who might care less about that TV classification or perceived quality as they do clear consumer engagement and seeing performance of campaigns.
To that point, month after month data from Nielsen’s The Gauge has reaffirmed YouTube’s status as the dominant service capturing the highest share among streamers for U.S. consumer TV time each month. YouTube is clearly a CTV leader, handily beating out traditional SVODs, including Netflix and ad-supported free streaming platforms, in Nielsen’s monthly snapshot. YouTube itself disclosed connected TV viewing, where globally, users streamed more than 1 billion hours of content daily on CTV in 2024.
Advertisers took notice and according to a new survey report of media agencies released by Pixability on the topic of US YouTube and CTV, 56% invested more in the video platform in 2024 than in 2023. The survey was of US-based media agency professionals that work directly on YouTube and/or CTV campaigns for brand advertisers.
Going into 2025 a smaller yet still significant proportion (44%) expect to increase investment over last year, while many (42%) expect YouTube budgets to remain flat on the heels of last year’s larger increase bump. Just 3% plan to decrease spending on the platform, down from 9% in 2024. Another 12% indicated they're unsure, up from 4% last year.
CTV at large benefited in 2024, a year that saw 58% of media agency professionals surveyed say they were investing more in the overall CTV space compared to 2023. And as Google and YouTube put more emphasis on the living room screen as a strategic priority, some of that spending headed its way.
According to data released by eMarketer, overall YouTube U.S. ad sales were expected to reach $8.68 billion in 2024 and despite a relative deceleration in the next couple of years, still grow 12.5% yoy to reach $11.06 billion annually by the end of 2026. Globally, YouTube generated $8.92 billion in ad sales in the third quarter of 2024 alone.
Handling YouTube becomes more complex for agencies
While content quality aspect is still a point of debate, how to categorize YouTube for overall marketing plans and across teams is becoming more complex for agencies, according to Pixability.
In recent years the company has made efforts to make YouTube more of an one-stop-shop video destination of sorts, including with partner channels.
In addition to the main YouTube platform, it has a Shorts offering for short-form creator content that competes against the likes of social video giant TikTok – the latter which has its own future in question as it faces a ban in the U.S. That’s not to mention the YouTube TV virtual MVPD pay TV service offered by Google, and CTV advertising options it offers via Google TV. In June, Google TV introduced options for free ad-supported streaming TV (FAST) advertising in combination with YouTube for CTV. And with the introduction of the Google TV Streamer last year, the device platform also upped the integration of YouTube content within search and discovery experiences through the CTV operating system.
As YouTube’s capabilities and offerings expanded, the complexity of where YouTube lives within a media agency has also increased. Agencies surveyed categorized YouTube in multiple ways in terms of their overall marketing strategy. Currently, most see it as standalone video platform, followed by a connected TV platform, a social media platform, and to a significantly lesser-extend a direct response channel.
“YouTube continues to increase in importance to advertisers, emerging not only as a leader in CTV, but also now as a leader in short-form too,” said David George, CEO of Pixability. “And while investment in YouTube will continue to grow, our survey reveals that some recent shifts in behavior and sentiment will make it even more complex and challenging for agencies and brands to get YouTube right.”
Various classifications also play into what teams within an agency handle investment for YouTube.
With agency teams set up in different ways, the Pixability report shows that many (45%) currently have teams handling YouTube and CTV together, while 38% expect CTV and YouTube teams to be combined in the future. And teams handling YouTube are poised to increasingly unify with TV overall. Per the report, nearly 30% of agency teams are currently arranged to handle CTV, YouTube and TV investment together – with another 40% expecting to unify those teams in the near future.
Increasing emphasis on performance
With a video platform that offers a wide range of content from different sources, across topics and in various forms, brand safety was a top priority for the past two years of the survey for agencies running campaigns on YouTube. Brand safety still made it into the top 10, but the latest survey saw a shift where performance-related topics were cited as top objectives, including ad performance, measurement and reporting, and efficiency rounding out the top three.
"YouTube continues to be an incredibly important piece of the puzzle for the brands we work with," said Jordan Pennino, VP, Digital and Programmatic for Dentsu, in a statement. “With the complexity of YouTube campaigns only increasing, it's critical that we ensure that we maximize outcomes for advertisers, while also running the campaign on content that aligns with the brand's values."
The report also predicts changes in strategies for agencies in how they utilize YouTube in 2025 compared to 2024, with a smaller share using the platform for awareness (55%) and an increasing proportion (47%) using it for full-funnel activities.
Brand suitability, transparency issues remain
Aside from brand safety, brand suitability – meaning ensuring ads don’t run against content that’s unsuitable for the brand, remains a key objective and challenge for YouTube and brands advertising.
Part of that is due to the eclectic nature of video content that can be found on YouTube, a lack of transparency into where ads run, as well as the risk of not using the right third-party pre-bid suitability measures – leading to waste.
The report authors wrote that “when it comes to suitability, agencies feel like without leveraging the right solutions, the average campaign can be 30% off-target and unsuitable. This is the exact same waste percentage they estimated in last year’s survey, showing the problem has not gone away.”
In addition to avoiding completely unsafe content, there are multiple types of video content that agencies are looking to avoid on YouTube when targeting adults, including Made-for-kids (79%), content where the primary language isn’t the same as the target audience (76%), and advertiser-specific unsuitable content (74%) like a burger chain ad running on vegan content, for example.
Notably, important capabilities are still lacking in Google’s native platforms, according to the report.
Among the top needs agencies still want from Google for YouTube are full transparency into where their YouTube campaign ran, the ability to avoid unsafe or unsuitable channels or videos, and the ability to see benchmarks of what’s working for other advertisers.
“Brand suitability on YouTube continues to be a key priority for many of the brands we work with,” said Michael Consolazio, Vice President Group Director, Media Technology at Groupe Connect, in a statement. “Advertisers aim to minimize risk by appearing only alongside content that aligns with their values while also ensuring strong performance that meets campaign objectives."
So even if agencies are still figuring out exactly where YouTube fits within their own strategies and teams, if the platform continues to be a dominant player in capturing consumer time and attention, advertisers will likely want to be there too, including the living room.
Article updated with new quote from dentsu.