Grim statistics are coming to light for Facebook and Twitter in regards to the efficacy of advertising on those sites — the ads don’t work. Time magazine just offered up an article showing that despite Facebook netting $7 billion in advertising revenue last year, 62 percent of the 17,000 people interviewed by Gallup said that social media had no effect on their purchasing whatsoever. And only 5 percent said they “heavily” use social media as a purchasing source.
According to a 2013 article in Forbes, “Viewers have become de-sensitized, or purposefully determined to block out advertisements and content that doesn’t interest them, or that they find intrusive. Study after study confirms that “click-through rates” on internet ads are just 0.01%, and that 4 out of 5 users (80%) have never even bought a product because of a Facebook ad.”
YouTube advertising tends to be more dynamic, interactive and in your face though. So how does it measure up against the rest? Does advertising work on YouTube?
Surprisingly, it seems to be a little explored world. There are numerous posts and articles about HOW to advertise on YouTube, even some articles about how much YouTube makes off advertising, and of course there are a bunch of articles (some by us!) dedicated to how much YouTubers can make off of advertising. But lost in the shuffle is the question of does this whole system work? Are people watching the ads they need to watch, clicking on the appropriate products and being influenced by the YouTubers whose videos are prefaced by those very ads?
Advertisers paid an estimated $4 billion for YouTube ads in 2012, up 60 percent from 2011, according to RBC Capital Markets stock analyst Mark Mahaney and Businessweek. In 2013, it was speculated to be closer to $5 billion. In short, a lot of money is being paid out on the theory of YouTube’s success in providing returns on investment.
Business Insider speaks highly of the clickable option for mobile users, offering up statistics from Neal Mohan, Google’s vice president for display advertising. The company’s TrueView mobile video ads, which offer the skip option and only charge advertisers if they are watched and clicked on, drove three times as much engagement as non-TrueView ads in the month since the company made the product available to certain mobile publishers. So giving viewers a choice to watch the ads is certainly preferential in the mobile market, but what about the overall picture? For that, Google offers Think With Google, a busy site that virtually throws solutions at you in the form of narratives expressing how some YouTuber made some aspect of the site work for them. It’s so busy in fact, it seems to function as a sort of shell game offering misdirection over answers.
Finally, we at NMR said, the hell with it and straight up asked YouTube: Does your advertising work? Obviously we knew the short answer was likely an “Of course.” But we were after specifics (because certainly Facebook too said that their advertising “works”). Fortunately, the good folks at YouTube were able to point us to a couple of studies that could answer our questions — as well as point out that YouTube wasn’t observed with that initial Gallup study. Included in YouTube’s bag of tricks is the TrueView ad option where viewers can select between two ads for enhanced engagement — it’s like a really boring version of those “Choose Your Own Adventure” books. But according to YouTube’s data, the TrueView works.
Not only did Mercedes Benz achieve a 69 percent view rate on their 14-minute TrueView ad, but the Broadway show “Cinderella” experienced a 12 percent boost in ticket sales after advertising. In fact, 71 percent of advertisers associated with YouTube experienced a significant elevation in their search rates. So that fairly answers that question.
Of course, TrueView ads only started becoming an applied standard in April 2014, so maybe YouTube saw this particular problem coming down the tracks and decided to get a little more “hands on.” Whatever the case, as far as social media goes, so far, YouTube looks to be an advertisers best bet.
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Here’s more behind the “science” of YouTube: