YouTube Changes: Are We Killing the Golden Goose?
By: Sean Stogner
Tags: Social Media Marketing, YouTube, Advertising, Strategy, Marketing

YouTube Changes: Are We Killing the Golden Goose?

Hyper-targeting, 1 Billion+ users, engaged audiences, & record low CPMs!

You may (or may not) have heard a wide swath of YouTubers coming forward over the last week with concerns about rapidly declining views on their new content. Pewdiepie, for instance, saw his latest vlogs generating under 2 Million views (so sad, I know).

But Pewdiepie wasn’t the only YouTuber to be hit with these sudden declines. And while some were quick to jump to the subscriber “glitch”, leading to hundreds of people being unsubscribed from channels on every upload, that isn’t the real culprit. So what’s causing this?

tl;dr explanation: Suggested Videos

YouTube tweaked their algorithm, and it seems to have affected the views generated by suggested videos drastically. Previous Pewdiepie videos generated nearly 30% of his views from suggested videos, while that percentage on new videos has dropped to under 1%. And that decline hasn’t been offset by anything else, which means he essentially lost 30% of his views overnight. So where did those views go?

Clickbait

While we’re all familiar with the practice of making clickbait-y titles and thumbnails to get views, the problem hasn’t directly affected the livelihood of YouTube’s core creators so dramatically. But this latest algorithm change seems to suggest a much greater emphasis on click-thru-rate over Relevance. Instead of Pewdiepie’s videos being the primary suggested videos alongside similar content, they are instead finding much more unrelated content, but content that seems geared toward generating more clicks.

(If you want a more thorough explanation of this change, I will refer you to Pewdiepie’s NSFW explainer below)

What does this have to do with advertising?

I imagine many of us would agree that the ability to reach more people more efficiently is a good thing. Previously, TV was the gatekeeper to reaching those people. But with the widespread adoption of the internet and it’s related content proliferation, people are spending more time than ever consuming content on a wider variety of platforms. Which means competition. Which means more competitive CPMs.

But there’s got to be an anchor point, the lowest amount companies (and in YouTube’s case their content creators) are willing to accept with regard to CPMs. This poses the first big thought: YouTube has reached their lowest CPM threshold.

Consider as well that YouTube’s parent company Google is facing the very strong likelihood of declining ad revenue (or at least declining growth) in both Search and Display within the next few years. And I think we can all agree that video is where much of that revenue will be migrating. Which poses my next thought: YouTube is being pressured to generate greater profit.

Finally, we have to look towards the overall category landscape. YouTube is no longer the undisputed video content king. Facebook is ramping up it’s efforts and commanding more time from consumers (and subsequently advertising dollars). Services like Netflix, HBO Now, and Amazon Prime Video offer ad free services and increasingly compelling catalogs of content. And there are only so many hours in the day one can watch videos (and ads). YouTube launched YouTube Red to try and compete with some of these ad-free services, as well as subsidize the low CPMs generated by ads for their creators. But that will only ever be a small part of YouTube’s overall revenue.