Brands may be paying lower rates for YouTube ads but the video service appears to be more popular than ever.
The average YouTube mobile session lasts about 40 minutes, up more than 50 per cent versus last year which is exciting marketers with the average spend of the video giant’s biggest advertisers up 60 per cent in its latest quarter.
The trend proved one of few bright spots in a quarter that continued the online giant's fifteen quarter streak of increased advertising revenues in spite of making less money on average from each ad. And while Google’s chief financial officer Ruth Porat conceded on its quarterly conference call that it was yet to convince brands to shell out as much for YouTube ads as they do for its search ads, she assured investors there was “strong momentum” among its users and advertisers.
“On mobile alone, YouTube reaches more 18-to-49 year-olds in the US than any US cable network. And the number of users coming to YouTube, who start at the YouTube homepage similar to the way they might turn on their TV is up over three times year-on-year,” Google’s chief business officer Omid Kordestani said on the same call.
It highlights that YouTube is more popular now than it ever has been. Viewership on the streaming service jumped 60 per cent in the quarter – that’s fastest growth rate it has been in two years, with mobile viewing more than doubling in the period. The average YouTube mobile session lasts about 40 minutes, while the average spend of YouTube's top 100 advertisers rocked 60 per cent. That’s not the only positive; the number of advertisers on YouTube is also up 40 per cent year-on-year.
Despite praising YouTube’s growth, Porat also claimed Google's ad price declines on YouTube’s skippable Trueview ads, which currently monetise at a lower rate than ad clicks on Google.com. While industry observers have rounded on Google’s mobile offering as the chief reason for lower ad rates, the company has singled out its video service given it now serves more than one billion monthly viewers.
Without giving specific numbers, Porat assured listeners that mobile ad prices continue to rise and that desktop rates are not in decline. “The gap between mobile and desktop continue to narrow,” she added. Cost-per-clicks (CPC) pricing on YouTube for TrueView ads - ads that users choose not to skip are lower than on CPC pricing desktop and mobile. YouTube TrueView ads represented a larger percentage of its overall clicks, so had a greater impact on CPCs, according to Google.
“Key highlights this quarter include ongoing momentum in our core search business particularly mobile, complemented by significant growth in YouTube revenues,” said Porat.
Publishers have greeted YouTube's growth with mixed reactions given the threat it poses to their own revenue plans.
Richard Dunmall, group managing director of advertising at Bauer Media UK, said: "Clearly the results highlight the broader growth in digital advertising for clients as a core part of their strategy. Video and mobile are particularly telling as key growth drivers. Perhaps as content owners accelerate their own offerings in those areas – focused on native solutions and high engagement – results may look different in the future."
Mobile searches now top desktop queries in 10 countries including the US and Japan. It is also making great strides to extend its mobile offering beyond its walled garden. For instance, Google is now indexing 50 billion links within apps, and 25 per cent of signed-in Google searches on Android now take users right to content within an app or to a link so they can install said app. The company’s advertising revenues rose 11 per cent year-on-year to $16n in the quarter.
Google backed cross-device campaigns, chiefly through its Doubleclick advertising platform, to continue to spur advertising sales, particularly on YouTube after it began offering advertisers cross-device metrics for their programmatic campaigns last month.
“All this is helping our content creators build the next generation of media companies doing what they love making great videos. The number of channels earning six figures per year on YouTube is up 50% year-over-year,” said Kordestani.