YouTube, the most-watched streaming service on TV screens for 15 months, is refining its pitch to advertisers as this year's upfront cycle begins. The platform is looking to create more scarcity by raising the threshold for its YouTube Select program and introducing a new option for advertisers to overtake individual channels in that package.
YouTube Select, which packages inventory across the top channels on the platform, will now consist of the top 1% of channels, down from the top 5%. This move ensures that YouTube Select represents the most sought-after, popular content on the platform.
In addition, YouTube is launching YouTube Select Creator Takeovers, allowing brands to buy out a given channel's ad inventory for two weeks. However, this has raised concerns about overexposure and the need for multiple creative assets to prevent repetitiveness.
The platform is also introducing an AI-powered ad optimization tool for non-skippable ads and updating the look of QR codes appended to ads. These updates are aimed at advertisers seeking to ensure their spending pays off.
Despite these changes, YouTube's upfront commitments remain different from traditional ones. Instead of locking an advertiser into spending a certain amount of money ahead of time, YouTube follows the endeavor deal model, where advertisers set a spending goal and are rewarded as they reach it.
The growing share of YouTube viewership occurring on TV screens could help YouTube to be seen by ad buyers in that broader TV bucket. However, it's still considered more of a short-form, online video budget decision versus a CTV decision.
In response to feedback from agency executives, YouTube stated that it delivers "a pretty effective CPM cost structure" for advertisers and offers the flexibility to "mix and match formats, lengths, buying types."
During the YouTube Newfront, Google unveiled the Video Reach Campaigns Non-Skippable, a new AI-powered video campaign type optimized for the living room.
Branded QR codes, a brand's logo that can be appended to ads running on YouTube, will be part of YouTube Select or attached to direct-response ads on CTV, typically sold on a cost-per-action basis.
With YouTube Select Creator Takeovers, brands can secure a 100% share of voice on a chosen channel's videos for two weeks at a fixed CPM. This means the brand will be the only advertiser on that channel during the takeover. Advertisers must provide multiple ad assets to avoid repetition and maintain viewer engagement.
