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The Truth About YouTube’s Monumental Ad Crisis

It’s left YouTube £750 million out of pocket and creators in turmoil!

Advertisers & content creators are in absolute uproar!

In one of their biggest advertising hiccups to date, YouTube are facing major advertising partners cutting ties with their platform. Why? Evidence that adverts have been placed on videos that containing rather risky content, including hate speech, anti-Semitism and terrorist sympathising content. Despite large public apologies from YouTube & Google, it’s too little too late for the likes of AT&T, General Motors, Walmart and Verizon, who have all taken action to stop advertising via the video giant. In reaction to this, YouTube have vowed to heavily investigate its automated Artificial Intelligence ad placement system, as well as bringing in new monetisation policies to further protect creators while keeping videos even more brand safe and controllable for advertisers

Meet the man behind the current crisis

At the heart of this crisis which is now so aptly known as the 2017 ‘Adpocalypse’ one man is responsible for raising awareness of this issue: a Mr Eric Feinberg.

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Mr Feinberg has been an advertiser and marketer for some time, however his motive to draw so much attention to the issue of misplaced adverts on monetised videos is the question of interest for many. Mr Feinberg actually owns the Michigan based company Gipec (Short for the Global Intellectual Property Enforcement Center) which specialises in Deep Web Interrogation which uses keywords and coding directly linked to terrorism and hate speech. Thus his campaign to send screenshots and links of monetised hate videos that are most definitely not brand safe to journalists around the UK & US.

And yes you guessed it, Mr Feinberg and his company already have a patented answer to this problem.

Having the solution for a problem before making sure the problem is so big that the company can’t afford to ignore it is a perfect example of what Mr Feinberg has tried and been fairly successful in accomplishing here.

In essence a classic example of problem-solution marketing backed with journalistic mass social media coverage & by hitting all creators that keep the platform so popular in their pockets too.

What YouTube once described as a tiny problem in past coverage, could now cost them upwards of $750 million in advertising revenue for 2017 (however, that would be little more than 2% of their net yearly profit).

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If Google look to solve the problem in-house then Mr Feinberg strongly claims he has a patent claim against any solution.

If they license the software off him, then he has a pretty penny coming his way in the deal, as he aims to avoid brands themselves angered by this issue by selling straight to the hosting platforms directly instead.

With Creators throwing their toys out of the pram left right and centre, and a $750 million dollar damage prediction could lead YouTube to reconsider Mr Feinberg’s proposal in a big way, if it leads to a swift solution and advertiser relationships being repaired as quickly as possible during this process of damage control and continued fallout.

Has the YouTube Adsense bubble burst?

As many creators post up videos announcing the death of their channels, their revenue dropping to near zero, them forcibly being targeted by YouTube, and having to end their full time YouTube careers.

The argument has to be made, was it folly of them to put all their eggs into one basket with Adsense revenue earnings in the first place?

Considering that the results and monetisation from it are 100% out of the hands of the content creators control, it can easily be argued it wasn’t the smartest move to not broaden their revenue streams, once small to mid level success for their channels had already been proven and a 50K+ per video viewership suitably maintained.

YouTube has outright stopped on the placement of premium adverts and heavily lowered its mid level ad placement as well, leading to reported revenue drops as high as 60%-80% on some channels. Creators making in the region of £1–3k per month in Adsense revenue (medium size creators) are being hit hardest which begs the question, has the Adsense bubble finally burst?

YouTube’s terms of service for creators actually started changing as of mid 2016 when content restrictions were sent out across the board effecting popular channels monetisation without formal warning.

Only to result in absolute uproar from creators that have only just noticed their revenue drop off a cliff at the end of the month when looking at their Adsense bottom line on videos that may have actually been demonetised for months, even years in some cases.

(The issue actually being that the changes were made very legitimately, however no formal notification service was setup to inform anyone — which is the more accurate route cause of the anger beginning in 2016)

What YouTube have said in response?

Google’s Chief Business Officer, Phillip Schindler, laid out the following in his almost immediate response on the Google Blog

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*“We know advertisers don’t want their ads next to content that doesn’t align with their values. So starting today, we’re taking a tougher stance on hateful, offensive and derogatory content.

We’ll also tighten safeguards to ensure that ads show up only against legitimate creators in our YouTube Partner Program — as opposed to those who impersonate other channels or violate our community guidelines.”*

Many content creators are now in uproar as Google rolls out an extensive search of all content that in any way flags up as not being brand safe for advertisers in response to the crisis.

Extensive swearing, hate speech, derogatory content, and negative personal targeting are all things that could land YouTubers with a dreaded yellow monetisation symbol next to their videos and an appeal form to fill in.

Although many creators wager their content does not fall into this category, the drop off in revenue and demonetisation of what in some cases has been up to 80% of their entire content library, means that their sheer massive stack of backlogged content all NOT contributing its part to their monthly Adsense payout, means many are now considering other options in a world where their fame means very little to a working world of industry experienced qualified career people.

Hilariously Fluffee even goes in on the PornHub partner program being more viable than youtube right now in a fantastic semi-troll video on the issue.

Without the audiences that they boast, are brand deals alone really enough to keep them fully afloat on the scale to which they have been accustomed to with little other relevant business knowledge or connections?

Moving forward for advertisers & content creators

As a Marketing & Content Executive that is spearheading a video content pivot for my own workplaces channel currently, these goings on are very much at the forefront of my mind right now, as the landscape could be in for a drastic level of change, most critically on the viewership and subscriber front.

YouTube has laid down two big immediate changes.

As they were already trying to comb through and delete literally hundreds of thousands of fake & duplicate accounts, a further policy has now been outlined.

Where by verification of a channel is being rolled into a process where its legitimacy will be judged by Youtube only once the channels lifetime viewership reaches 10,000+ views.

Before this the YouTube Content ID system was actually already in place (a system whereby content owners could submit their work to a database so the engine could easily identify when a copyright overlap or claim is in order allowing both parties to decide how to appropriately move forward) which for the many channels that haven’t been affected by Adpocalypse, seems to work sort of well already and wasn’t causing that many problems.

Furthermore, Google has promised a rigorous overhaul of its advertising placement system, and has hired specialist staff to focus solely on the improvement and management of the advert and monetisation system to ensure certain promises, in an effort to win brand advertisers back to the video giants platform.

In Conclusion

Personally i feel this is the moment to pounce Twitch has been waiting for!

I would predict a MONUMENTAL shift in creator loyalty and potentially critical shifts in YouTube’s viewership to go with them, as the ever sought after dream of a full time YouTube creator career has just taken a shotgun double tap to the chest for all new and existing small to mid level creators — with Eric Feinberg having pulled the trigger.

If you enjoy all the YouTube & Video marketing news, as well as Cloud, tech, gaming and more then follow this blog for more :)

Posted in Productions and video on Apr 24, 2017

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