One of the most thrown around terms within the YouTube community is “demonetization.” Now, YouTube is piloting a new program that will let creators sell ad space directly to brands they work with regularly.
The pilot program is extremely limited and only works for deals between creators and brands that already have a relationship, Tom Leung, director of product management at YouTube, said in a video from January, spotted by Tubefilter today. This will mean “basically allowing a creator to sell ads directly to a brand,” Leung said.
“We know a lot of people are very interested in this topic, so it’s a very small pilot now, but as we have more information, we will definitely share it out as soon as we can,” Leung said in the video.
Creators selling ads to brands would follow what partners like NBC have been granted permission to do since 2010: control where the ads come from. Since partners could do it since 2010, why were creators exempt? One reason could be murky disclosure situations. If a creator runs an ad for a company that they work with on a retail product, like a makeup palette, on a video where they’re talking about that same palette, do they have to disclose it? YouTube hasn’t outlined the guidelines around these deals, but it sounds like a potential FTC nightmare. The Verge has reached out to YouTube for more information.
Giving people more control over what ads play on their videos, and letting them figure out an advertising strategy that doesn’t rely on YouTube rolling out ads to certain creators, is something creators have routinely requested. Top creators tend to earn the most ad revenue and do so through earning higher CPM rates (the amount of money they earn for every 1,000 viewers), as long as that content is advertiser friendly. The reasoning makes sense: top creators generate a higher number of views on average. Other advertising opportunities, and revenue from those ads, then trickle down to the thousands of creators who belong to YouTube’s Partner Program.
Advertising on YouTube is a big business. Google saw more than $15 billion in advertising revenue from YouTube in 2019 alone. The issue is that as advertising policy changes, and creators have to shift their own content strategy, relying on advertising revenue becomes trickier and trickier.
“Creators who are successful on the platform have come to learn through growing pains what it takes to run a financial successful creative business, while working with advertiser guidelines,” YouTuber Roberto Blake previously told The Verge. “They understand — and made — those hard choices.”
As advertising problems within the community grow, two areas have grown: alternative monetization and brand deals or sponsorships. Alternative monetization is anything from Super Chat, which allows creators to charge $5 for fans to leave top comments in live-stream chats, and merchandising. Brand deals are seen in many creators’ videos, including top stars like David Dobrik, who often partners with SeatGeek for his vlogs. Essentially, creators like Dobrik can now sell advertising space directly to a company like SeatGeek.
It’s unclear how many creators are part of the program or whether YouTube will expand it in the coming months.