YouTube is making significant changes to its ad monetization system in an effort to simplify the process and maximize revenue for creators. In a recent announcement, the video-sharing platform unveiled several key updates aimed at enhancing the overall user experience and helping creators optimize their earnings. This is just one of many recent initiatives aimed at increasing advertising revenue on the platform.
Simplified Ad Controls
One of the most notable changes is the simplification of ad controls in YouTube Studio. Starting in November, YouTube will streamline ad settings for ads that appear before or after long-form videos. This means that individual ad controls for pre-roll, post-roll, skippable, and non-skippable ads will be removed for newly uploaded videos. Instead, when creators enable ads, viewers may encounter any of these ad formats.
For mid-roll ad breaks, creators will still have full control, allowing them to manually select ad breaks or use automatic ones. Furthermore, previously uploaded videos will retain their existing ad format settings, but any future edits to a video's monetization will also be limited in accordance with the new rules.
Will My Viewers Accept This?
YouTube's data from the past year indicates that over 90% of long-form videos with monetization enabled had pre-roll, post-roll, skippable, and non-skippable ads turned on. Therefore, the majority of creators should not notice a significant change. However, some creators have been avoiding non-skippable ads due to the fear of losing viewers. According to YouTube, there is no such danger.
YouTube ensures that various factors, such as viewing time and ad interruption frequency, determine when these ads are shown, all with the aim of maximizing revenue while ensuring a positive viewing experience.
The Test Results Are Promising
The decision to implement changes was made based on hard data. In the first half of 2023, YouTube conducted an experiment that showed creators who enabled non-skippable ads, in addition to multiple combinations of other ad formats, experienced over a 5% increase in YouTube ad revenue, with less than a 1% decrease in watch time. Similarly, creators who enabled pre-roll ads alongside other ad formats saw over a 15% increase in ad revenue, with less than a 5% decrease in watch time. Taking the results into consideration, it appears that the introduced changes could be beneficial for creators… as well as for YouTube itself.
Less Income Due to Shorts Success
According to information recently provided by the Financial Times, concerns about the displacement of longer, more profitable video formats by less profitable shorts are becoming increasingly prominent in YouTube's strategic meetings. Shorts were initially intended to complement the platform's offerings but are now beginning to impact the core business.
Especially among younger audiences, there is a preference for consuming shorter content, leading creators to produce fewer long-form videos. Additionally, brands are starting to favor product placement in short-form content as well.
The changes being introduced may be YouTube's attempt to respond to declining revenues. However, they are not the only response…
For some time now, tests have been conducted on content managed by MCNs (Multi-Channel Networks), also related to the density of ad placements and their impact on earnings and viewing time. Moreover, in the coming months, creators will have a third option for optimizing mid-roll ad breaks in long-form videos. They can combine automated ad breaks recommended by YouTube with manually set ad breaks, giving the system even more flexibility to select the most suitable time to show ads to viewers.
The next steps of the platform involve the "Skip Ads" button, which allows you to skip the displayed advertisement. Tests are currently underway for its reduced and more transparent version. And if we add to all of this the intensified battle against ad-blocking software, we can see that the effort to increase revenue has kicked into high gear.
Expanding Ad Opportunities on Live Streams
Some new options include YouTube-optimized mid-roll frequency, self-selected mid-roll frequency, and new live display ads coming to live streams as well.
To improve the user experience, YouTube is introducing a 60-second countdown before mid-roll ads appear in the Live Control Room. Creators will have the option to skip the ad before the countdown reaches zero. Additionally, a "Delay ads" button will be available, allowing creators to prevent mid-rolls and live display ads from appearing for 10 minutes. If an ad is skipped or delayed, creators can manually insert mid-roll ads using the "Insert ads" button. Please follow the Google Support post for the full announcement.
Karol Kulpa
