May 4, 2018 - Technology

Advertisers show up for YouTube despite brand safety concerns

Deanie Elsner, President of U.S. Snacks for Kellogg's, speaks onstage during the YouTube Brandcast 2018 presentation on May 3. Photo: Taylor Hill/FilmMagic

Advertisers from Fortune 500 companies, like Kellogg’s and Wendy’s, appeared as part of YouTube’s annual “Broadcast” advertising presentation Thursday, touting the effectiveness of YouTube as an advertising and brand partner.

Why it matters: Despite dozens of headlines over the past year about content problems on YouTube’s platform — from pedophilia and terrorism videos — and numerous threats from advertising giants to pull money from the site, YouTube is still able to lure the industry’s biggest spenders and most prominent voices in marketing.

"Youtube has become our number one online video partner for Kelloggs in just two years.”
— Deanie Elsner, President of Kellogg’s Snacks Division
  • Eisner said the company increased ad spending on the platform by 300% last year alone. She added that the company wasn’t on YouTube in 2015, but since then the platform has completely changed its digital strategy.
  • It's notable that Kellogg's appeared to support YouTube Thursday, because a number of its rivals, from Procter & Gamble to Unilever, in the struggling consumer packaged goods (CPG) space, have threatened to pull ad money from YouTube's parent company, Google, if it didn't clean up the content on its platform.

YouTube CEO Susan Wojcicki addressed the controversies at the top of the program, telling the crowd of thousands of advertising executives, “There isn’t a playbook for how open platforms operate at our scale. But the way I think about it, is it’s critical that we are on the right side of history.”  

It should be expected that YouTube continues to retain advertisers, despite content hiccups on the platform around bad content.

  • Google's parent company Alphabet beat Wall Street expectations when it reported earnings last week, increasing revenue 26% year-over-year to $31.16 billion for the first quarter.
  • YouTube net ad revenue will grow 39.9% this year to reach $7.80 billion worldwide, according to the latest forecast from eMarketer. eMarketer also estimates that YouTube is the leading OTT (over-the-top) video service in the U.S with 185.9 million users this year, and presenting 92.6% of OTT video service users in the US.

What's next? The night was filled with presentations from YouTube executives, advertisers, artists and creators, many of whom spoke to the power of YouTube's advertising brand, and particularly for native advertising integrations into their videos.

  • Tyler Oakley, a young YouTube star, touted his native ad partnerships with Procter & Gamble, which has for months threatened to pull YouTube and spending, as well as 23 and me. "The alignment I had with these brands was perfect," he said.
  • Nick Cicero, CEO of Delmondo, a social analytics company, says this is how YouTube creators should be thinking about advertising on the platform. "It should be a huge sign that YouTube’s top stars like Tyler Oakley love and advocate for branded content and not blanket rev share," he tells Axios.
  • Note: YouTube's presentation to woo advertisers every year is very over-the-top, with this year including performances by Ariana Grande and Camila Cabello, followed by a reception at Rockefeller Plaza.
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