Technology

How to make programmatic advertising work in a post-GDPR world

How to make programmatic advertising work in a post-GDPR world

If you’ve been paying attention to the news lately, you’ve probably been bombarded with news about privacy, data and our favourite 4-letter acronym: GDPR. One of the biggest stories was the Cambridge Analytica data scandal, where over 50 million Facebook profiles were harvested to target political adverts. This shook the world and ever since people have been questioning how their personal data is actually being used.

Though, the issue of personal privacy has been cropping up for years. Although the internet has made it easier to collect personal data, there’s been controversy surrounding the invasion of privacy long before the wide use of the internet. For example, at one point, a bill was put forward in the state of California to ban caller ID because they felt it was a breach of privacy for the caller to have their information displayed.

But it’s only now that substantial steps are being taken to protect personal data, hence the General Data Protection Regulation (GDPR) was born.

GDPR: one month on

If you haven’t heard about GDPR (though, how could you avoid it?), it’s a law that aims to protect all EU citizens from privacy and data breaches. This regulation was enforced a month ago, on 25th May 2018.

So, what’s happened since? Businesses within Europe that handle personal data are facing more legal obligation for how they collect, process and store this data. Within the digital advertising world, personal data is collected for audience targeting, but this strategy is changing – big time. As a result, we predict other marketing and targeting techniques will flourish and ad tech will play a dominant role in this change.

How is GDPR affecting Coull?

Data privacy is affecting most businesses, but some more than others. At Coull, we’ve always taken our user’s data and their privacy seriously and so we haven’t had to change our business processes or behaviours. Though we have updated our policies and contracts to reflect our adherence to the GDPR guidelines and we will continue working closely with our partners to ensure compliance.

Ultimately, GDPR is an opportunity for responsible businesses to add value in an open and transparent way. We hope this is the start of a new era of transparent data processing across our industry.

How is it affecting the digital advertising industry as a whole?

Many digital advertising strategies rely on collecting a person’s information through browser cookies – which stores information such as age, gender, location and general interests. Whereas GDPR means that people now need to ‘opt-in’ to having their information collected. This poses a problem for advertisers who want to target audiences this way.

However, changes are already happening, such as a push towards more sponsored, social media and influencer marketing. For example, Adidas has quickly capitalised on the World Cup, by working with footballers and celebrities for social media content, directly targeting their followers.

Does this mean programmatic advertising is dead? No! Of course not. There are still successful and ‘GDPR safe’ ways to use digital advertising…

All in context

Contextual advertising is one way to avoid using personal data. It uses information on the content itself to make assumptions and then target the audience with a relevant advert. This is ‘GDPR safe’ because it doesn’t need to use personal data.

Contextual targeting has many different levels, depending on the technical and analytical capabilities, such as targeting by domain, keywords or location. For example, Land Rover may want to contextually target their audience at a domain level with an advert on a car review website.

contextual programmatic advertising, OverStream OnPause format

An example of Coull’s OnPause format displaying a Land Rover ad in a contextually targeted environment.

Retarget without using cookies

Cookie monster eating cookies

Source: Giphy

Advertisers can be real cookie monsters, collecting as many cookies as possible to target a particular campaign to the same person, again and again. However, without consent to collect their data, it can make retargeting hard. So let’s forget about the non-edible cookies, shall we?

This is where ad tech can really make a difference. For example, our format, DoubleUp, delivers a ‘two-part’ retargeting campaign in the video player. First of all, a pre-roll ad is shown, then the video plays and the second part of the campaign, a display creative, is presented in one of our OverStream formats.

As an example, Emirates might want to advertise to and retarget international travellers. They decide to put a pre-roll ad before a video about Dubai on a travel tourism website:

Contextual programmatic advertising, pre-roll DoubleUp

Emirate pre-roll (first part of a DoubleUp campaign).

Then as the video content starts playing, they can use the OverStream Banner format to retarget the same person using a CTA banner from the same campaign:

contextual programmatic advertising, OverStream Banner DoubleUp

An example of Coull’s OverStream Banner in a DoubleUp campaign for Emirates.

This feature:

  • Retargets someone in a ‘GDPR safe’ way
  • Gives people a direct ‘Call To Action’ for the pre-roll
  • Shortens the customer journey by immediately retargeting whilst you still have the customer’s attention

Aside from using different targeting techniques, education and transparency are now more important than ever. If advertisers want to continue collecting data in a post-GDPR world, they’re going to have to win back the trust of the people, through respect and complete transparency. This involves, being open about their policies and making both opt-in and opt-out options clear and easy to follow. But unfortunately, many organisations are simply using confusing wordplay to give consumers no other option other than to simply ‘accept and close’ to approve the collection of their data. This is misleading and isn’t an effective way to earn trust.

Website GDPR privacy data consent

An example of how some organisations mislead their audience and are able to gain consent to collect data

But, there’s still hope. The digital advertising industry can be incredibly creative, so it’s a matter of ‘innovate to survive’ in the world of GDPR. Perhaps this will not only encourage transparency but also give the industry an opportunity to rethink ways to deliver great advertising without invading people’s privacy. We will have to wait and see…

Posted by Mark Lee in Coull comment
Why Coull is putting brand safety first (and why you should too)

Why Coull is putting brand safety first (and why you should too)

What do they say to you before you hop on to a rollercoaster? Safety first! Now, it’s also a phrase that can be applied to digital advertising and brand safety - and what a rollercoaster ride the ad industry has been on recently.

Only last year, people were questioning big fish like YouTube about the safety of brands when advertising on their platforms. It was discovered that some ads were being placed next to unsafe content, such as terrorist or extremist content. This led to multiple brands, such as Pepsi and Walmart pulling their ads from YouTube, as it was not only harming their brand image, but it also meant their ads were possibly funding unsafe videos.

Hence, why the main focus from 2018 onwards should be about putting brand safety first.

So, what can be done to improve brand safety in the digital ad industry?


Industry standards are the key that opens up the doors to trust

The most important thing is working with completely transparent and trusted partners. The vital building block in any relationship is trust. So why would a business partnership be any different?

Companies should be seeking industry body accreditation to give their partners peace of mind. The IAB have launched their Gold Standard initiative, with the aim to reduce ad fraud, improve the digital advertising experience and increase brand safety.

A part of the Gold Standard is becoming a JICWEBS signatory and adhering to the DTSG brand safety principles. The aim of the Good Practice Principles is to improve transparency in the UK digital advertising market, giving brands more confidence that their advertising will reach the right audience in a brand safe way.

On our journey to gaining the IAB Gold Standard and showing our own dedication to brand safety, we’ve partnered with JICWEBS and have recently been awarded our brand safety seal of compliance!


What does this mean?

  • Industry standards body, ABC have verified our compliance with JICWEBS DTSG Good Practice Principles.
  • We’re proactively delivering on the industry demand for more transparency in digital media.
  • We’re making sure that when you partner with us, you can partner with confidence.
  • We’re supporting JICWEBS, made up of the trade bodies, the IAB, AOP, IPA, ISBA and News Media Association.

We earnt this through our transparency in the digital ad industry and our dedication to our compliance process. We have invested in and improved our proprietary technology to ensure anti-fraud and brand safety. Our dedicated compliance team and partnerships with industry-leading verification vendors ensure a very comprehensive compliance process.

Check before you buy

There are certain things you can check out before partnering with a company, such as, if they are a reputable company, what their domains and content is like, if they have their own brand safety policy and if they have official accreditation.

Pre-boarding checks are an important part of Coull’s compliance process. Prior to signing contracts, all inventory is human vetted by Coull’s dedicated compliance team and verified as safe, or rejected – at which point further talks with the supply partner will be terminated. The example of what we look for when we filter are: ghost sites, illegal content, graphic violence, the IP reputation, botnets, the viewability of inventory and lots more.

If we are happy with the company and their domains, we can then think about partnering. At this point, the company must agree to comply with our policies, including our brand safety policy.

Whitelists

Keeping up with the countless sites out there and filtering between the brand safe and the unsavoury, all whilst fast-moving fraudsters wait in the sidelines, can become a bit of a ‘cat and mouse’ game. However, whitelists are an effective way to navigate in the wild web. A whitelist is a list of approved and acceptable sites to run campaigns on.

As well as our pre-boarding checks, we analyse and categorise supply inventory that is human-verified. This creates a whitelisted inventory pool that demand partners may opt to buy from. This double verification provides a deeper level of invalid domain detection.

The human element

In a highly technologically world, digital advertising needs some element of human judgement. No matter how much you try to automate a process with technology, it’s unlikely a machine will ever truly know what ‘brand safety’ is because it’s a subjective term and the meaning will change with the times.

Coull employs both human and technological approaches to identify and prevent ads being delivered into content environments that may pose a risk to brand image. Bringing technology and human elements in at the right points in the compliance process means we can all bask in the brand safety glory.

___________________________________

Brand safety is at the forefront of our minds so that all of our partners have full trust in us and we hope that it encourages the rest of the industry to follow suit.

Let’s make 2018 the year we all put brand safety first.

Posted by Naomi Sandercock in Coull comment, Coull news
We’re crowdfunding! Become a part of the Coull story

We’re crowdfunding! Become a part of the Coull story

EDIT (16/7/18): fundraising has now ended.

We are crowdfunding! But, hang on...what exactly is crowdfunding?

Crowdfunding is a way of raising finance that makes it easy for anyone to invest in a growing business, from as little as £10. We’re raising funds on Crowdcube, Europe’s leading equity crowdfunding platform.

What do we do and why are we raising funds?

We’re the advertising technology company that aims to make better online advertising experiences for everyone, and we need your help to do this

We are raising funds to:

  • Increase our sales team
  • Build upon our targeted marketing strategy
  • Continue with product development in line with client requirements

As a result, we can grow as a business in the £12bn UK digital ad market and most importantly, make online advertising a better experience for everyone.

So, how do we make advertising better?

Our innovative advertising formats give creative freedom to advertisers while ensuring the user viewing experience is enhanced rather than damaged. Importantly, our technology ensures that website publishers still get paid, thus keeping the internet free for us all.

How to get involved…

We’re raising investment through Crowdcube, a leading UK crowdfunding platform. Crowdfunding allows you to invest in Coull from as little as £10.

For the next 30 days, you can invest in Coull on Crowdcube and become a part of the Coull story.

If you have any questions, please get in contact.

Please remember, investments of this nature carry risks to your capital. Please Invest Aware.

Posted by Naomi Sandercock in Coull news
The Power of Video

The Power of Video

Online video has been around ever since I can remember, I grew up with it - even if it was through a dodgy dial-up connection. But video advertising has also been around since I can remember, and it’s not all been as positive. Don’t get me wrong, when advertisers get video right, they really get it right, like this famous ad from Cadburys. But why are high-quality, memorable and relevant video adverts so few and far between?

Gone are the days when advertisers could spend weeks and months planning the perfect advertising campaign for a billboard or magazine page. We’re now living in a fast-moving, rapid-consuming world, we want video and we want it now. There’s a panic amongst advertisers, millions of videos are being watched every day and adverts need to follow that audience. And so, rushed, ineffective and non-engaging video ads are born, in an attempt to get something - anything - into the video space, ignoring quality and only focusing on the quantity.

And that’s just where the advertising industry has gone wrong. There’s such a rush to get into the video space, in front of an audience, that the most important thing has been forgotten...the people watching. There’s no use putting a message out there, if it isn’t high-quality content, if it doesn’t engage and if it’s not relevant.

Videos can be powerful, but we need to learn to harness that power to win over audiences once again.

The Power of Video

Last week, we hosted a breakfast event all about digital video, called The Power of Video. The aim of this event was to discuss the current state of the online video advertising industry and how to unlock the power of online video.


The IAB’s Senior Industry Initiatives Manager, Mike Reynolds, presented first, focusing on video trends and creative research. He shared some research to emphasise the huge growth of the video market.

Video is driving market growth

X3 | The time spent watching short video clips online has tripled in the last three years.

Source: IAB / YouGov consumer insights, October 2017

£699m | Online video has overtaken banners as the largest display format.

Source: IAB / PWC Digital Adspend Study H1 2017

But he also touched on how mobile is such a big influence on advertising spend.

Mobile video is also driving growth

68% | Mobile video is up 68% year on year, making it the fastest growing format.

Source: IAB / PWC Digital Adspend Study H1 2017

Lastly, he spoke about the IAB’s research, ‘Fit for Purpose’. This research looks at how advertisers tailor creative video ads for mobiles. If you would like to find out more about ‘Fit for Purpose’, the IAB is hosting the official research launch on 20th March 2018.

Next up was Coull’s very own Director of Agency Sales, Alex Wright.

Alex asked the question, why are videos so powerful? The answer: it’s part of our DNA. Paying attention to motion and avoiding cognitive strain are just a few reasons why we are hard-wired to favour video over any other format.

Perhaps more importantly for brands, is that videos can generate far more emotional cues than a photo can, with the ability to tell an extensive story and appeal to a wider range of senses.

It's ideas that evoke specific emotional responses: joy, sadness, anger, laughter etc. These emotions fuel passion and drive human behaviour while building a brand relationship with an audience.

Emotions form brand connections

But, as Alex went on to say, that power is being diluted through poorly made videos that don’t take their audience - or the device they’re watching on - into account. However, here are the 4 action points from Alex on how to get the most out of your video advertising:

how to unlock the power of video advertising infographic

Follow these steps and we can say goodbye to videos that make little to no impact and say hello to engaging, high-quality videos that connect brands and audiences.

Are you unsure of the best way to follow-up a pre-roll? This is where we can help.

We enhance the impact of your pre-roll by giving it an immediate follow-up within the video player. We can offer a variety of follow-up options from within our OverStream Suite. When you pair our OverStream formats with pre-roll, we call this DoubleUp.

Our OverStream Suite formats:

OverStream Banner - video advertising format

Banner

Our simplest format that delivers results from inside the video stream.

The Banner appears for 30 seconds, offering brand engagement opportunities. The user can choose to dismiss the advert at any time with a clearly distinguished close button.

 


 

Minimising MPU

Grabs attention and encourages action, with your audience in mind.

The Minimising MPU format appears in the corner of the video player for 5 seconds before minimising to a small ‘ad-expand’ icon that re-expands on user interaction. The user may then engage with, or close, the advert at their discretion.

OverStream Minimising MPU - video advertising format

 


 

OverStream OnPause - video advertising format

OnPause

An intelligent ad format, shown when the audience clicks pause.

OnPause delivers an ad on the video player each time it is paused by the user. This is easily dismissable via the ‘dismiss’ button or automatically when content is resumed.

 


 

 

However, we see the value of both high-quality pre-roll and high-quality video content. Our aim is to add value to any video. So, if you would prefer to not use pre-roll, you can still reach video audiences solely through any OverStream format, so you can still make use of a valuable and viewable online space.

If you’re interested in how Coull can help you harness the power of video advertising, check out The OverStream suite or contact us.

 

Take a look at the photos from The Power of Video...

Posted by Naomi Sandercock in Coull news
Coull wins Deloitte award and becomes a top ranking technology company

Coull wins Deloitte award and becomes a top ranking technology company

Yesterday, technology business directors from all over the country gathered for The Deloitte Technology Fast 50 awards ceremony in London. Our very own Managing Director, Dan Ginns, and Finance Director, Simon Alpren, were amongst the guests.

We’re very proud to announce that Coull has been ranked 9th in the 2017 Deloitte UK Technology Fast 50, a ranking of the 50 fastest growing technology companies in the UK. Companies such as Deliveroo and Move GB were also in the Top 10. Not only this, but we have been ranked number 1 in the media sector of the Tech Fast 50. Rankings are based on percentage revenue growth over the last four years and Coull has a 1,915% growth.

Dan Ginns, said: “We’re very pleased to be Top 10 of the Tech Fast 50, which denotes accelerated growth for Coull as we concurrently transition our business and announce new products and partnerships to market. We’ll be seeking to maintain such growth levels in the coming months and years. We’d love to be ranked number one in the Tech Fast 50 one year.”

Deloitte Fast 50 awards 2017

The award ceremony at The London Hilton Bankside

The Deloitte Technology Fast 50 is one of the UK’s foremost technology award programmes, celebrating innovation and entrepreneurship. Now, in its 20th successful year, it is a ranking of the country’s 50 fastest growing technology companies, driven by leading intellectual property and based on revenue growth over the last four years.

David Cobb, lead partner for the Deloitte UK Technology Fast 50, said: “The Deloitte UK
Technology Fast 50 gives great profile to technology companies and is internationally recognised as being one of the most important business awards in the sector. This year’s ranking highlights the importance of being innovative, recruiting high-skilled talent and finding a niche product or service.”

Making the Deloitte UK Technology Fast 50 is a significant accomplishment for all of the team and we’re all looking forward to seeing what 2018 holds for Coull.

Deloitte Tech Fast 50 award

Posted by Naomi Sandercock in Coull news
RTB 2.5 – new features that affect video advertising

RTB 2.5 – new features that affect video advertising

The IAB has released the new RTB 2.5 spec and there are some interesting new changes around video advertising. Here are a few of the changes…

1 video.placement

This allows publishers and SSPs to describe the type of placement that an ad is being requested for. We’ve all seen 300×250 ad placements come through and we all know they’re in banner requests. Now we have a way of explicitly saying that.

2 Data Encoding

You can now specify a data encoding header that should be handled by the bidder. A good example of this would be specifying gzip encoding of the bid request. This simply compresses the traffic over the wire from exchange to bidder and back, saving on bandwidth and ultimately, money.

3 Bid Changes

There are a few changes to the bid object. A bidder now has the ability to provide a Billing Notice URL (burl) and a Loss Notice URL (lurl).

For Coull, this added layer of transparency is something we’ve been passing to bidders already, albeit relying on our own tech to make that possible. It’s an important inclusion as brands and agencies are demanding more clarity about what they’re bidding on and the results. We optimise the process by allowing the bidder to see if they’ve won or lost and what the winning price was.

The addition of these two features introduces a subtle but important change to the data a DSP can get from an auction. The win notification can now be thought of as just that.

The burl is a great addition, it’s a stage further on from the current win notification. The burl will provide a more accurate way of tracking spend based on delivered impressions, it tells you that the impression cost $x.  Splitting these 2 things up enables DSPs to track things like failed impressions and possibly partners that may have issues with their player.

The loss notification adds another dimension to this information. It enables the DSP to immediately know that the spend that they had assigned to the auction is now free – there will be no impression. Coull has been offering loss notifications since the introduction of its Exchange and we’re pleased to see this finally make it into the RTB specification.

4 Source

The new Source object lets the exchange pass on some data about whether or not there will be a decision made from the exchange. Header Bidding is the obvious example here. But more and more Ad Managers are holding client-side auctions to increase the amount of demand an opportunity sees. It’s now normal to see sideways connections from exchange to exchange, again to increase the amount of demand available in an efficient way.


RTB 2.5 onwards…

There are some more changes, little and big, to the spec but I’ll leave it there for now. The above represents what we believe to be the most interesting ideas in the new spec. It’s great to see some positive changes have been made in the is the RTB 2.5 update. We’ll look for yet more improvements in version 2.6.


If you liked this post, we recommend reading:

ODV spells good news for publishers

Our impressions of the IAB OpenRTB 2.4

Posted by simonholliday in Coull comment
Coull CEOs martech and adtech predictions 2017

Coull CEOs martech and adtech predictions 2017

Aden made his predictions about the ad tech industry at the end of 2015 and unsurprisingly to us, proved the spirit of Yoda really does thrive within him.

Aden Forshaw co-founded Coull back in 2008 but this year has been his big leap, being appointed CEO and taking the reins. He has been integral in bringing some exciting developments to fruition. For example, the launch of the OverStream Suite and eradicating invalid traffic from the marketplace, starting with the Coull Platform.

In this post, Aden, CEO and Yoda of Coull gives his predictions for what the programmatic ad industry is going to look like in 2017.

Top predictions

1.The ad tech bloodbath

The tools now exist to highlight any middlemen representing poor inventory or adding no value. As a result of the adoption of these tools, there will be a bloodbath of inadequate ad tech middlemen. Ad networks will continue going out of business in 2017 as the demand side goes around them with programmatic direct. This is good news for quality publishers, who will see their CPMs rise, and for ad tech players creating real value to cut through the noise.

2. Sweating the asset

Brands are paying top dollar for the right spot, within the right inventory, and are also paying the mass of vendors to validate the quality of the spot they’re buying. 2017 will see brands demand more ROI from their investment and more from their agencies. As for the ad units itself, real-time creative backed by deep-learning AI will take us back to a time when advertising was fun and engaging.

3. Artificial Intelligence

Look forward to buzzword bingo at every conference with a lot of people not understanding what AI means. We’re referring to the deep-learning variant, the same that Google has been using so successfully with Quickdraw. This will create new ways of interacting with an audience and find niche audiences that once relied on manual targeting.

ad tech predictions - Artificial Intelligence

4. Measuring the garden – accountability for all the big players

Measurement standards will finally be applied inside walled gardens. YouTube is already moving that way, as is Facebook with its continued ‘mea-culpas’ – buyers are demanding more. This will be the draw of more TV money online, but it’ll mainly go to Facebook rather than the open web.

5. Civilising Mobile Video

2016 was the year that all the verification vendors to help clean up desktop video, 2017 will be mobile. Sophisticated vendors like White Ops are already raising large amounts to dedicate themselves to the task but it’s time to apply them to mobile. It’s still a wild west of VAST inventory, but app makers are finally coalescing around a small number of Ad SDKs, meaning mobile VPAID will soon be the norm.

ad tech predictions - mobile video

6. Another acronym joins the team – hello H-2-H – goodbye B-2-C

2016 saw the direct to consumer revolution take hold, led by players like Dollar Shave Club. Big brands have taken note, and are following suit. This will see them try new creative approaches to reaching an audience, with heavy experimentation on Chatbots and personalised video campaigns. It’s about human to human communications, brand stories, and ideas.

7. Widening cracks in the looking glass

Viewability has become a widespread proxy for ad quality during 2016. But the cracks have already been clear to see, with ample evidence of its fallibility and potential for gaming. Industry experts and savvy advertisers are already calling for an exercise in caution when putting viewability on a pedestal. Underlying fraud and the drudging pursuit of unattainable standardisation in viewability measurement will become more of a theme as 2017 progresses. Expect publishers and advertisers to put their support behind ad formats that are more viewable by design and engage audiences in more tangible ways.

Some of the other predictions we expect…

EU Data

The EU General Data Protection Regulation won’t hit until 2018, but by the end of 2017, we’ll see it shake out for implementation. It’s a seismic shift in how data is handled not just for advertising, but all PII and metadata about users.

Expect more hacks

In technology terms, some ad tech platforms have been around for aeons. There are legacy security models, and antiquated tech stacks, especially those built by third parties and not maintained. With ad tech providing an easy way to touch so many people, expect a few big hacks in 2017.

Google’s open source video player

It’s long been doing the rounds of the rumour mill but this year could very well see the launch of Google’s open source video player. Once launched, the player will inevitably compete with VideoJS, and take market share from established players like JWPlayer, and potentially Brightcove. Of course, it will plug into Google’s ad tech stack, straight out of the box.

Commoditisation means old display ad tech will take a beating

Header bidding has commoditised what was once locked-in relationships. Expect to see the old guard struggle, especially those that haven’t successfully added video and mobile to their offering. The shelves stacked with out-of-date ad units will collect dust as new creative, engaging and data-driven formats fly off, attracting the attention of agencies and trading desks.

We’re hoping to see big changes in 2017, with the momentum toward cleaning up programmatic swinging in the right direction already, its transition across platforms will be a game changer. The adoption of AI and more targetable ad tech will become normal as quality, trusted inventory with highly engaging ad formats takes centre stage, finally allowing digital publishers to earn their keep.

The final word…

2016 delivered transparency, in 2017 we’ll see action emerge from insight.

Posted by simonholliday in Coull comment

The Coull ad request journey – Whatsapp style

An ad request really is like a group discussion with everyone bringing something to the table. Our Invalid Traffic Detection looks pretty straightforward but it’s actually made up of multiple fraud detection vendors as well as our in-house compliance team.

Also, our QUASAR tech has some amazing layers that help us ensure the best inventory and brand match. The right conversation means we get the best possible performance every time.

We hope this Whatsapp style conversation helps to clarify the ad request process and get some more conversations going.

whatsapp Coull ad request journey 1

whatsapp Coull ad request journey 2

whatsapp Coull ad request journey 3

Posted by simonholliday in Coull comment

Coull Quickie October – The one about ad fraud

We’ve spoken about ad fraud before – it’s making headlines. Lots of platforms and vendors are saying they’re doing something about ad fraud. But the proof shouldn’t be about expensive marketing campaigns claiming miracles, it’s in the investment by tech companies to make a real change to the way digital media is bought.

Let’s break this down, discard the sugar coating and get real.

Posted by simonholliday in Coull video
10 years of YouTube and still no dollar signs

10 years of YouTube and still no dollar signs

I adore Youtube, it’s a safe home for free speech, education and live cat streams. They’ve enabled anyone with a video camera to be discovered on merit alone and new young stars to have a viable career.

2016 marks 10 years since Google acquired YouTube. It seems fitting that the traditional gift for a decade of dedication is tin because Google hasn’t made much more than that in revenue.

After 10 years, YouTube is still not profitable. That’s crazy.

When YouTube stars first emerged it was incredibly exciting to think anyone off the street could make money and possibly even a career from the ‘broadcast yourself’ mantra. For a while, it seemed like the dream, but now YouTube stars are being lured to other platforms that invest in their talent and provide better advertising formats or sponsorship deals.

Creators are jumping ship because YouTube doesn’t enable enough worldwide fill. A video star may get 1,000,000 views from Egypt, but they won’t make any money. Their audience is either geographical or coincidental and nothing is gained from the view. There’s no impetus to scale and the CPMs advertisers pay is too low.

When creators do hit that sweet spot and make money from their videos, YouTube takes a heavy cut – 45/55 split to be precise. That’s a hefty sum to handover.

The 6 YouTube sins

We’ve established it’s crazy that YouTube isn’t profitable. But, why? We’ve narrowed it down to these 6 deadly sins.

1. No premium content

It’s not like they haven’t tried to be a central hub for premium content – they just haven’t tried hard enough.  For a while, Channel 4 had all its content on Youtube, but they removed it because they could earn a lot more on their own 4oD service. The login wall on 4oD gives them valuable first-party data and their existing sales team can sell directly without YouTube taking a cut. This is where Google’s walled garden approach really started, it’s not a fair model for any creator and many won’t tolerate it anymore.

2. Awkward for Advertisers

YouTube shut off access to other DSPs like Tubemogul last year. For creators, Youtube is incredibly easy and open, for advertisers it’s really awkward. Buying a specific video, using your own targeting data, and your own viewability and verification vendors are just not going to happen. This is a historical problem.

When Google first bought Youtube they had a hard time getting their salespeople to actually push it. They were used to the easy money machine that was search and display. It wasn’t until they made it 20% of the sales team’s bonus that they actually got many sales at all.

3. Premium short-form video was driven away

A few years ago when it was hard to sell your own video ad space. Mid-sized publishers used to upload all their videos such as gadget reviews on Youtube, and then let YouTube take care of monetization. But as video SSPs like SpotX and StickyAds made the process of selling your own inventory easy, they’ve all gone back to using other hosting platforms like Brightcove or Ooyala. And YouTube just watched them go.

4. No cut of sponsorship or product placement

Whilst the revenue split isn’t an ideal model, YouTube does a fantastic job of nurturing creators by providing free studio time. But a massive opportunity has been squandered. What wasn’t grasped was the potential to connect brands to creators, instead they’ve just let them go to another MCN (multi-channel network such as Maker Studios or Fullscreen).

5. Lack of brand safety

Love or loathe them, everyone knows how much vitriol YouTube comments contain. Automatically filtering content is incredibly tough, especially with so many cultures and languages. So, without the ability to whitelist, the risks to brand reputation are still there. Whilst recent changes have been made to remove monetization from videos that aren’t ‘advertiser friendly’ – it’s far from perfect.

Not a destination – if YouTube’s ‘home page’’ was a holiday destination, we’d be asking for travel compensation. As an average user, your entry point to Youtube.com is via a link someone else has shared. The only reason to go there is to see the recommended videos and most people just watch embeds in other sites. It’s not pretty, it’s not particularly well thought-out, it’s a bumpy ride. But, Facebook looked at the numbers of people clicking out to Youtube and decided they wanted in. Hence, launching Facebook video serendipitously with no content protection systems. This enabled people to simply upload stolen clips from YouTube and get massive views, all inside Facebook’s wall.

6. Lack of ad format innovation

The big one for me. YouTube engineers have created the best pre-roll format ever made. TrueView is loved by advertisers and tolerated by users. It’s led to innovative creative that engages a user within 5 seconds. YouTube do small tests all the time with things like brand recall surveys and implement minor changes. But rarely do they ever see full production.

There is a palpable lack of creative innovation, in fact after 10 years, this is their full ad format selection – this is their selection…

Can they turn it around?

Youtube Red

YouTube is pushing their subscription service hard and with a lack of ad revenue, it’s easy to see why. However, they’ve landed themselves on a double-edged sword. If the subscription model is too successful, it will naturally cannibalize the ad business – disproportionately so. Those who can afford a subscription are generally those which advertisers will pay more to reach.

Live streaming

Herein we reach the zeitgeist. Facebook et al are throwing tons of money at live stream content. YouTube isn’t a destination site that an average user spends tons of time loitering on, like Facebook so the use case is different. YouTube views are rather more like appointments, rather than a serendipitous opportunity in your news feed. Still, neither YouTube nor Facebook has a viable way to monetize live stream, interrupting the stream for a 30-second ad is not the solution. The time to make the bold innovation in ad formats to suit evolving watching habits is now.

YouTube may currently be the king of short form, but if they don’t start shifting the goalposts, it won’t take another 10 years before a blue logo’d upstart takes over. Whether it’s building a better destination for users, innovating on ad formats or forging partnerships with those using YouTube content, something has got to give or the 20 year anniversary will mark nothing but another penniless decade.


Can’t believe it’s been 10 years of YouTube? Neither can we, but luckily, Coull’s own Scott Mackay is never too far away to remind us what user content looked like back in 2006. And while this video is still fun 10 years later, Scott is yet to receive his millions – will future Scott be any better off?


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Posted by simonholliday in Coull comment