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The Adpocalypse: What it Means

2017-04-21 · explainer · Hank · 3:54 · watch on YouTube

Topic: Internet & YouTube · mode: News analysis · tags: timely hook, self promotion

Explaining the Adpocalypse, Hank argues that YouTube ads, its whole business, are precarious and undervalue viewers; after advertisers fled over ads on vile videos and the algorithms tightened, he asks whether the radio-era ad model is a holdover and predicts creators will find other ways to be paid.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Why Hank built a business on ads anyway: YouTube's audience and its system for turning views into money, unlike Facebook

  • ★★ Hank says he is not a huge fan of advertising as an institution, yet built an entire business on ad revenue to make SciShow, Crash Course and more. — 00:00:00 · SciShow, Crash Course
  • ★★★ Hank says YouTube uniquely provides a massive audience it may push toward quality content, and a system to turn views into money. — 00:00:12 · YouTube
  • ★★ Hank says no one will leave YouTube until someone does both things better; Facebook does only one, yet people post there like crazy. — 00:00:31 · YouTube, Facebook
  • ★★ Hank says YouTube has shared revenue with creators for 10 years while Facebook has not, building an ecosystem of creators who earn some money without much headache. — 00:00:39 · YouTube, Facebook

00:00:51 — YouTube ads pay far less than TV; ads are YouTube's whole business but precarious and viewers' time is undervalued

  • ★★★ Hank says each ad played on a YouTube video pays the creator about ten times less than the same ad on TV. (hedged) — 00:00:53 · YouTube, online advertising
  • ★★★ Hank says YouTube shows about five times fewer ads per minute watched, so the average channel earns about 50 times less per minute of viewership than a TV channel. (hedged) — 00:01:00 · YouTube
  • ★★ Hank protests that his eyeballs are worth ten times more on TV than on YouTube though they are the same eyeballs; at some point an audience is valued so low you say no. (playful) — 00:01:11 · YouTube
  • ★★ Hank says ads are YouTube's whole business, worth billions of dollars, but precarious. — 00:01:24 · YouTube, online advertising
  • ★★★ Hank says ads are just worth less online: people dislike, skip and block them; and while his eyeballs are worth less online, his time is worth more, since it is active time. — 00:01:31 · online advertising

00:01:45 — The Adpocalypse: articles, advertisers pulling out, Google's valuation, YouTube's buckets and tightened algorithms

  • ★★★ Hank says that after articles a few weeks ago showed major brands advertised on vile YouTube videos, many advertisers pulled all their ads, and every YouTuber's revenue fell. — 00:01:45 · YouTube
  • ★★ Hank says Google's valuation dropped by about $750 million in a day. (playful, hedged) — 00:02:04 · Google
  • ★★ Hank says YouTube sorts content into buckets: hand-picked channels like Crash Course sold as safe and expensive, an algorithmic no-ads bucket, and a confusing middle no one understands. — 00:02:09 · YouTube, Crash Course
  • ★★★ Hank says that afterwards all the algorithms tightened: some channels rebounded but many fell further, squeezing creators of good but not super-happy-family-fun content. — 00:02:29 · YouTube

00:02:46 — Is the radio-era ad model a holdover? New ways to support content; YouTube and advertisers will need viewers more

  • ★★★ Hank asks whether the content-brand relationship, designed for radio, is a useless holdover from another century, forcing new ways to turn created value into spendable value. (speculative) — 00:02:46
  • ★★ Hank asks whether advertisers losing their reach to people under 65 would really be bad, since he can decide how to spend his money without them. (hedged) — 00:02:59
  • ★★★ Hank says if the value proposition breaks, creators will find (and already are finding) new support: subscriptions like Rooster Teeth's First, YouTube Red, Patreon, and creator-brand relationships communities like. — 00:03:12 · YouTube

  • ★★★ Hank warns that YouTube and advertisers must be careful, because eventually they will need viewers' eyeballs more than creators need their pennies. — 00:03:32 · YouTube

    “eventually, they're gonna need our eyeballs more than we need their pennies.”

00:03:41 — Internet Creators Guild plug

  • ★★ Hank tells creators that the Internet Creators Guild is designed to advocate for people like them, with links in the description. — 00:03:44

In the description and comments

  • ★★ The description says watching revenue tank in early April was terrifying, but it got them thinking about many other ways to support the content, which excites Hank. — video description
  • ★★ The description says YouTube eased independent creators' path to revenue, but automatically sold ads have always been priced so only very large channels earn significantly. — video description · YouTube, online advertising
  • ★★★ Hank says more and better systems are needed to help independent creators, and spending actual money rather than time watching ads is vital; he thanks everyone who has bought merchandise or supported their projects on Patreon, since those who can pay make it free for everyone. — video description
  • ★ Hank recommends CGP Grey's video on how YouTube's ad-selling mechanisms work. — video description · YouTube
  • ★ Hank points to the podcast he hosts, ICG Creator Chat, where he talks with creators about their strategy and goals. — video description

Threads in this video

Where the stories that moved here went next

Mentioned

Central: advertising · online advertising · YouTube · YouTube Adpocalypse

Also: Projects: Crash Course · Internet Creators Guild · SciShow

Organizations: Facebook · Google · Patreon · Rooster Teeth

Concepts: sponsorship · television

Products: Rooster Teeth First · YouTube Red

Only in the description or credits: CGP Grey · ICG Creator Chat

Also centred on advertising: Thoughts from Yachts

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