You know things are bad when the engineers show up in suits.
In early January, YouTube’s technical chiefs dressed up to meet privately in Las Vegas with several prominent ad agencies. The Google executives in charge of YouTube’s ad sales had arranged the meetings to assure advertisers the video site was working to get its problems under control. Months of outrage had followed reports that YouTube had let terrorist leaders continue to post recruiting videos and aired the juvenile blunders of young stars PewDiePie (who cracked anti-Semitic jokes) and Logan Paul (who filmed the corpse of an apparent suicide). The bigger problem for advertisers: bewildering, sometimes grotesque videos appearing on YouTube’s dedicated channel for children. Think young kids being force-fed or a knockoff of a popular cartoon pig being tortured in a dentist’s chair.
Google’s solution was to safeguard a tiny slice of YouTube, one sanitized for marketers, with every video vetted by human moderators. The rest of the familiar YouTube free-for-all would have far fewer channels running ads. Advertisers would have less reason to worry that their pitches might run ahead of Nazi humor or child exploitation. “The human review is fantastic,” says Jon Anselmo, chief digital officer with ad giant Omnicom Media Group. “The devil will be in the details.”
YouTube has pledged to hire 10,000 people to root out inappropriate clips and train computers to do the same, and it will beef up the rating system for advertisers paying for its Google Preferred premium package. A second tier of YouTube creators will still be allowed to run ads and get a piece of that revenue, but newbies will have to prove themselves. Other details remain elusive. YouTube said in a statement that it aims to “curb bad actors, stabilize creator revenue, and provide greater assurances to advertisers.”
The creation of this walled garden marks a big change for YouTube, which has always presented itself as a playground where any video creator can become popular enough to make a living. Cutting up-and-coming creators out of its ad revenue may threaten its ability to attract and retain talented ones. The shift underlined how eager YouTube is to win back advertisers that have boycotted in the wake of one debacle or another. Royal Bank of Canada estimated that a first wave of defections last year cost the $10 billion site $750 million.
“While there’s still more to be done, we’re encouraged by YouTube’s efforts to fix their brand safety issues,” says Marc Pritchard, chief brand officer for Procter & Gamble Co., which previously slashed its ad spending. “This is important, and they’re on it.” Other ad buyers remain skeptical of the sanitized version. YouTube has never been diligent about purging unseemly content from its site, says one marketing chief who didn’t want to be named, so why should anyone take this bit of crisis PR seriously?
With its new restrictions in place, of course, YouTube will have fewer videos to sell ads against, meaning it will likely charge more for each spot. Now no creator with fewer than 1,000 subscribers will even be allowed to run ads on their videos.
When Google announced the changes in mid-January, it said 99 percent of the affected video channels earn less than $100 a year. That didn’t soothe many creators, some of whom were already furious when YouTube cut some videos it deemed risqué out of its ad network last summer. “Every time I’m so close to a goal and I’m so close to something @YouTube changes the rules and literally knocks me down,” tweeted Tianna Ouellette, a YouTuber who posts makeup and beauty videos.
A few YouTube stars, including Philip DeFranco (6 million subscribers), advised lesser-known video makers to seek donations from viewers on platforms such as Patreon. Phillip Huynh, a director at ad agency 360i, says he expects aspiring YouTube “influencers”—online entertainers with a large, typically young following—to start spending more time on other sites. “You have to be on YouTube, but they won’t go all-in,” he says.
The first true test for YouTube will come in the spring with the NewFronts, the digital equivalent of the upfronts, an annual gathering where TV networks pitch shows to advertisers. In 2012 at the first NewFronts, YouTube “was the only show in town,” says Omnicom’s Anselmo. Now, if they don’t like what they see, advertisers, like the video makers, have other options.
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