YouTube monetization <-?-> Advertising decline

[Jet_ski]

This relates to something that Linus talked about on the WAN show: a big decline in how much YouTube is paying content creators right now.

 

It turns out this is not a channel specific problem but rather the entire advertising industry is under pressure because of the covid-19 pandemic. Even Google and Facebook are impacted. And most of what I read and hear is that their ad revenue will be disappointing. So they are paying content creators less for the ads.

 

Quote

Expedia chairman Barry Diller told CNBC on Thursday morning that Expedia will slash ad spending this year, joining a chorus of advertisers that are putting campaigns on hold or cancelling spend altogether.

 

"At Expedia, for instance, we spend $5 billion a year on advertising. We won't spend $1 billion on advertising probably this year," Diller said. "You just rip that across everything." He noted that advertising spend across the board would be hit in the second quarter. 
.

.

.

On the company's February fourth-quarter earnings call, Diller mentioned Expedia is one of Google's biggest advertisers and that Expedia is trying to move away from its "reliance on Google and Metasearch" to grow more direct relationships with its customers.

Link: https://www.cnbc.com/2020/04/16/barry-diller-expedia-wont-even-spend-1-billion-on-ads-this-year.html

I’m sure it’s not just the travel industry that’s going to pull ad spending. If something is considered a large purchase, I expect the OEM/distributor ads to be cut for the time being.

 

This is being talked about a lot in financial circles. And some of the debate is on whether Facebook is truly a tech company or an advertising agency in disguise. The importance of this classification is that investors put a premium on tech stocks relative to other industries. Here’s a comparison on how Netflix and Amazon stocks are outperforming Facebook and Alphabet. It seems like investors expect disappointing ad revenue from the latter.
 

[Arika]

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

[Onehandstand]

29 minutes ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

Lots of youtubers I've been following recently have reported surges in viewer counts, especially in the first hour they upload. Sadly they have also reported losses in income compared to this time last year which makes almost no sense. Surely advertisers are seeing this increase and viewers.

[Techstorm970]

I wonder if the added cost of handling the extra network traffic outweighs the added revenue gained from increased viewership...

[poochyena]

1 hour ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

from the article, it seems to be less companies are advertising due to lower budgets from the virus. can't display ads if there are none to be displayed (which also leads to less competition between ads, so they are worth less)

[Jet_ski]

1 hour ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

 

40 minutes ago, Onehandstand said:

Lots of youtubers I've been following recently have reported surges in viewer counts, especially in the first hour they upload. Sadly they have also reported losses in income compared to this time last year which makes almost no sense. Surely advertisers are seeing this increase and viewers.

While more ads are shown to viewers, they aren’t the high value ads. Instead of seeing Mercedes and Lexus ads we are seeing obscure ads that don’t pay much per view.

[Jotoco]

When nobody is spending, ads are worth very little. 

 

I'm getting small local companies that must pay YouTube very little 

[Kisai]

7 hours ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

It doesn't, because guess who does all the ad buys. Not JC Penny or McDonalds. Advertisement "offices", which if they weren't already working from home, are certainly non-essential and closed. No company ever direct buys ads on Google, it's a pain in the ass, and google absolutely doesn't care about the people who put ads on their site. If I think my content is worth $2.00 CPM, I want $ 2.00 CPM or I'm better off advertising my own affiliate links to Amazon rathern than the 0.02CPM that Google offers sites that don't generate 1 million page views per day. If you aren't getting a million views on your YT video within 24 hours, you too are getting that crappy $0.02 CPM, only that initial window is worth anything.

 

It was actually kinda bizarre reading about Google not being the first ones to order work-from-home.

 

At any rate, when people don't have money, people don't buy. When people don't buy, ad dollars are basically wasted trying to sell to people with no money.

 

With that said, google/youtube's advertisement model has been swirling the toilet for over 5 years and anyone who relies on it, has a nasty surprise coming. Ad revenue is a 1% rule. 1% get all the revenue. It gets poached from everyone else because the advertisers are only willing to put ads on "safe" content, and not just any safe content, safe content that has a built in audience that matches their ad buys.

 

So people watching gaming content or animation/storytime videos, these really should be seeing upticks in ad revenue because their content is the kind that people will just turn on and watch actively or passively. But that's not the story from them. Their content would probably pay them more if it was on Netflix, but Netflix doesn't want content that's already on youtube, they want exclusives. 

 

[Master Disaster]

10 hours ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

Profiteering to compensate for lost revenue in other places. If they can keep earning the same amount or more from selling advertising while also paying people less for showing them its basically free money.

[RejZoR]

It's funny how everyone goes poor in 1 month of this stupid virus. Before this everyone was buying 1500€ phones, 1000€ graphic cards in pairs, 5000€ gaming systems etc. Something doesn't add up here...

[Curious Pineapple]

1 minute ago, RejZoR said:

It's funny how everyone goes poor in 1 month of this stupid virus. Before this everyone was buying 1500€ phones, 1000€ graphic cards in pairs, 5000€ gaming systems etc. Something doesn't add up here...

I guess when you're out of work its not the best idea to go buying shite you don't need

[Master Disaster]

1 minute ago, RejZoR said:

It's funny how everyone goes poor in 1 month of this stupid virus. Before this everyone was buying 1500€ phones, 1000€ graphic cards in pairs, 5000€ gaming systems etc. Something doesn't add up here...

The reason everyone is broke is exactly because they were buying those things and not saving.

[RejZoR]

1 minute ago, Master Disaster said:

The reason everyone is broke is exactly because they were buying those things and not saving.

I doubt it. If you're so on edge financially, you're already buying things you can't even afford as is.

[Curious Pineapple]

1 minute ago, RejZoR said:

I doubt it. If you're so on edge financially, you're already buying things you can't even afford as is.

If you earn 3 grand a month and just waste it, the day you are told not to come into work you have nothing. There are people in low paid jobs with huge savings, and people in high paid jobs that have nothing in the bank at the end of the month.

[Bombastinator]

11 hours ago, Arika S said:

You would think ad revenue would go up given that most people have to stay at home and are probably watching more YouTube and browsing the internet, ergo, more ads displayed

The source of ad revenue is companies trying to sell stuff though, and companies in trouble often cut ad budgets first.  Plus I kinda doubt say a cruise line, is going to be buying ads atm. 

[Master Disaster]

12 minutes ago, Curious Pineapple said:

If you earn 3 grand a month and just waste it, the day you are told not to come into work you have nothing. There are people in low paid jobs with huge savings, and people in high paid jobs that have nothing in the bank at the end of the month.

I earn about £1200 a month (which is a fairly decent wage and above the national minimum), it will be 4 weeks on Friday since I last got paid and I still have a quarter of that amount left in my account so I'm doing OK. This month though I will only be getting 80% of my full wage which makes things trickier.

[LAwLz]

1 hour ago, RejZoR said:

I doubt it. If you're so on edge financially, you're already buying things you can't even afford as is.

It's not that simple.

 

We are currently heading towards a recession. That means that people will lose their jobs.

Take me for example. I most likely won't lose my job anytime soon so I am not worried, but let's say I was. I usually don't spend a whole lot of money. I save most of my money, and in recent times I have started saving money in investment funds. I have quite a lot of money saved up.

 

But let's say I risk losing my job. All my set expenses don't care that I have lost my job. I still need to pay interest on my loans, pay for insurance, pay for transport, pay for my housing and so on every month. The money I have saved will only last for so long. The investment funds where I have money saved has also lost a lot of value, so even my "money reserve" has all of a sudden lost a lot of its value. So what do I do? I cut back on all expenses so that my money will last longer. The 1000 dollars for computer parts that I may have been saving up over the last 12 months? That will now go towards keeping my apartment one more month.

If I lose my job, I will lose money every month rather than make money. That means I can not save any money, and the money I have saved now becomes my emergency fund even though it might have been saved up for something else.

 

Economics isn't as simple as just "if you bought X before and now has a lack of money then you couldn't actually afford X before". People who bought 1000 dollar phones before might not have been on the edge financially at the time of the purchase. But now that they have lost their jobs, and their savings have lost value they might be.

 

[Bombastinator]

8 minutes ago, LAwLz said:

It's not that simple.

 

We are currently heading towards a recession. That means that people will lose their jobs.

Take me for example. I most likely won't lose my job anytime soon so I am not worried, but let's say I was. I usually don't spend a whole lot of money. I save most of my money, and in recent times I have started saving money in investment funds. I have quite a lot of money saved up.

 

But let's say I risk losing my job. All my set expenses don't care that I have lost my job. I still need to pay interest on my loans, pay for insurance, pay for transport, pay for my housing and so on every month. The money I have saved will only last for so long. The investment funds where I have money saved has also lost a lot of value, so even my "money reserve" has all of a sudden lost a lot of its value. So what do I do? I cut back on all expenses so that my money will last longer. The 1000 dollars for computer parts that I may have been saving up over the last 12 months? That will now go towards keeping my apartment one more month.

If I lose my job, I will lose money every month rather than make money. That means I can not save any money, and the money I have saved now becomes my emergency fund even though it might have been saved up for something else.

 

Economics isn't as simple as just "if you bought X before and now has a lack of money then you couldn't actually afford X before". People who bought 1000 dollar phones before might not have been on the edge financially at the time of the purchase. But now that they have lost their jobs, and their savings have lost value they might be.

 

Investment funds have their own problems at the moment.  They at least to some degree rely on buying little pieces of companies which increase in value.  When the companies in question reduce in value instead of increase value the investment goes down rather than up.  This is why investment specialists like to talk about diversification.

[RejZoR]

29 minutes ago, LAwLz said:

It's not that simple.

 

We are currently heading towards a recession. That means that people will lose their jobs.

Take me for example. I most likely won't lose my job anytime soon so I am not worried, but let's say I was. I usually don't spend a whole lot of money. I save most of my money, and in recent times I have started saving money in investment funds. I have quite a lot of money saved up.

 

But let's say I risk losing my job. All my set expenses don't care that I have lost my job. I still need to pay interest on my loans, pay for insurance, pay for transport, pay for my housing and so on every month. The money I have saved will only last for so long. The investment funds where I have money saved has also lost a lot of value, so even my "money reserve" has all of a sudden lost a lot of its value. So what do I do? I cut back on all expenses so that my money will last longer. The 1000 dollars for computer parts that I may have been saving up over the last 12 months? That will now go towards keeping my apartment one more month.

If I lose my job, I will lose money every month rather than make money. That means I can not save any money, and the money I have saved now becomes my emergency fund even though it might have been saved up for something else.

 

Economics isn't as simple as just "if you bought X before and now has a lack of money then you couldn't actually afford X before". People who bought 1000 dollar phones before might not have been on the edge financially at the time of the purchase. But now that they have lost their jobs, and their savings have lost value they might be.

 

And when it's not a recession? There's always some dumb bullshit. If it's not migrant crisis it's some dumb ass virus and if it's not any of this it's manufactured by corporations and their garbage business decisions that fuck everything up on global scale.

[williamcll]

Or maybe because more people are downloading Adblockers.

[MageTank]

2 hours ago, RejZoR said:

And when it's not a recession? There's always some dumb bullshit. If it's not migrant crisis it's some dumb ass virus and if it's not any of this it's manufactured by corporations and their garbage business decisions that fuck everything up on global scale.

This has absolutely nothing to do with the point @LAwLzwas making, or even your original point for that matter. You can't equate having spare money before a crisis to not having money after a crisis, and say "Oh, you shouldn't have been so frivolous". A thriving economy requires people to spend money on more than just the bare necessities for survival. Even with an ample savings, it can disappear pretty quickly depending on how many bills you have and how large of a family you have to feed. I know people that had contingency plans for losing their jobs, having reduced income and what not, only to realize that those plans have fallen through. A few of my previous techs received amazing job offers, left to go train only to have those offers rescinded, and our company can no longer offer them their old positions. Do you consider that a lack of foresight? Should they have declined the offer of higher pay and better benefits because they don't know if a virus might break out and cause that offer to be rescinded? You can only prepare so much for situations like these before you are forced to roll the dice.

 

It's also impossible to use this logic as a rationalization on a grand scale. Here in the US, different parts of the country will be impacted differently. Our more rural states like West Virginia are already at an economic disadvantage with the political battles of coal mining (one of the few available jobs in that state) and many families already live well below the poverty line in the more rural parts of that state. When their non-essential jobs furlough them and they have nowhere else to work, they'll only be able to survive on unemployment for so long. These people are not frivolous spenders either. The vast majority of my family in West Virginia don't even have internet, their vehicles are extremely outdated and they all live in old trailers on land owned by people that would gladly sell the land to nearby coal companies. 

 

The other side of the coin is places like California, where the cost of living is extremely high regardless of your economic class. A $1200 supplemental income check in California will not go as far as it would in rural West Virginia, and paying to keep your home would be far more difficult due to the higher prices. Once you factor in population density and people competing to remain employed in order to provide for their families, it becomes extremely clear that no matter how much you saved or how frugal you were prior to a crisis, it's simply not sustainable to remain unemployed for a few months when your standard cost of living is higher.

 

I wish it were as simple as "buy only what you need, you'll be fine", but it's just not.

[Brooksie359]

4 hours ago, RejZoR said:

I doubt it. If you're so on edge financially, you're already buying things you can't even afford as is.

I would disagree tbh. I have a large amount of savings in the bank just for this type of event or any other reason that would result in me not having a job for an extended period of time but now that we are in such a hard time even though I have plenty of savings does not mean I want to spend my money on non essentials. I even still have my job and the same income as well yet I still do not feel like spending money on non essentials because in the current environment it is not hard to see a situation where this recession ends up causing me to lose my job in the long run. There is also the question of just how much do we are people supposed to have saved before they can still afford to be spending in unnecessary things at a time like this. I honestly am hopeful everything will go back to normal soon but I am planning for the worse just like alot of other people. Spending on non essentials is not a particularly smart move at the present time unless you have a large safety net of savings. Also keep in mind that while I have alot of savings and can use it in the event that I no longer have a job that does not mean that I would use it frivolously because I would like to keep as much of my savings as possible. 

[Brooksie359]

27 minutes ago, MageTank said:

This has absolutely nothing to do with the point @LAwLzwas making, or even your original point for that matter. You can't equate having spare money before a crisis to not having money after a crisis, and say "Oh, you shouldn't have been so frivolous". A thriving economy requires people to spend money on more than just the bare necessities for survival. Even with an ample savings, it can disappear pretty quickly depending on how many bills you have and how large of a family you have to feed. I know people that had contingency plans for losing their jobs, having reduced income and what not, only to realize that those plans have fallen through. A few of my previous techs received amazing job offers, left to go train only to have those offers rescinded, and our company can no longer offer them their old positions. Do you consider that a lack of foresight? Should they have declined the offer of higher pay and better benefits because they don't know if a virus might break out and cause that offer to be rescinded? You can only prepare so much for situations like these before you are forced to roll the dice.

 

It's also impossible to use this logic as a rationalization on a grand scale. Here in the US, different parts of the country will be impacted differently. Our more rural states like West Virginia are already at an economic disadvantage with the political battles of coal mining (one of the few available jobs in that state) and many families already live well below the poverty line in the more rural parts of that state. When their non-essential jobs furlough them and they have nowhere else to work, they'll only be able to survive on unemployment for so long. These people are not frivolous spenders either. The vast majority of my family in West Virginia don't even have internet, their vehicles are extremely outdated and they all live in old trailers on land owned by people that would gladly sell the land to nearby coal companies. 

 

The other side of the coin is places like California, where the cost of living is extremely high regardless of your economic class. A $1200 supplemental income check in California will not go as far as it would in rural West Virginia, and paying to keep your home would be far more difficult due to the higher prices. Once you factor in population density and people competing to remain employed in order to provide for their families, it becomes extremely clear that no matter how much you saved or how frugal you were prior to a crisis, it's simply not sustainable to remain unemployed for a few months when your standard cost of living is higher.

 

I wish it were as simple as "buy only what you need, you'll be fine", but it's just not.

Not only that but if you get the virus and have to be hospitalized you are going to have a large bill to pay on top of all this. This is assuming you live in the US as I am unsure what hospital bills are like outside the US

[Bombastinator]

44 minutes ago, MageTank said:

This has absolutely nothing to do with the point @LAwLzwas making, or even your original point for that matter. You can't equate having spare money before a crisis to not having money after a crisis, and say "Oh, you shouldn't have been so frivolous". A thriving economy requires people to spend money on more than just the bare necessities for survival. Even with an ample savings, it can disappear pretty quickly depending on how many bills you have and how large of a family you have to feed. I know people that had contingency plans for losing their jobs, having reduced income and what not, only to realize that those plans have fallen through. A few of my previous techs received amazing job offers, left to go train only to have those offers rescinded, and our company can no longer offer them their old positions. Do you consider that a lack of foresight? Should they have declined the offer of higher pay and better benefits because they don't know if a virus might break out and cause that offer to be rescinded? You can only prepare so much for situations like these before you are forced to roll the dice.

 

It's also impossible to use this logic as a rationalization on a grand scale. Here in the US, different parts of the country will be impacted differently. Our more rural states like West Virginia are already at an economic disadvantage with the political battles of coal mining (one of the few available jobs in that state) and many families already live well below the poverty line in the more rural parts of that state. When their non-essential jobs furlough them and they have nowhere else to work, they'll only be able to survive on unemployment for so long. These people are not frivolous spenders either. The vast majority of my family in West Virginia don't even have internet, their vehicles are extremely outdated and they all live in old trailers on land owned by people that would gladly sell the land to nearby coal companies. 

 

The other side of the coin is places like California, where the cost of living is extremely high regardless of your economic class. A $1200 supplemental income check in California will not go as far as it would in rural West Virginia, and paying to keep your home would be far more difficult due to the higher prices. Once you factor in population density and people competing to remain employed in order to provide for their families, it becomes extremely clear that no matter how much you saved or how frugal you were prior to a crisis, it's simply not sustainable to remain unemployed for a few months when your standard cost of living is higher.

 

I wish it were as simple as "buy only what you need, you'll be fine", but it's just not.

youre not quoting @LAwLz you’re quoting someone who quoted her. It’s a mistake I’ve made too.  Just pointing it out without judgement.

[MageTank]

17 minutes ago, Bombastinator said:

youre not quoting @LAwLz you’re quoting someone who quoted her. It’s a mistake I’ve made too.  Just pointing it out without judgement.

That was intentional, I quoted the guy that quoted LAwLz to tell him that his post had nothing to do with the point LAwLz was making. 

 

36 minutes ago, Brooksie359 said:

Not only that but if you get the virus and have to be hospitalized you are going to have a large bill to pay on top of all this. This is assuming you live in the US as I am unsure what hospital bills are like outside the US

Yeah... and it's amplified tenfold when you have to account for the family medical bills. Another aspect people don't factor into it is that even those that are not furloughed have to find a way to take care of their kids. School is basically canceled country wide at the moment and many parents had to immediately adapt to their kids not being at school while they were at work.