June 4, 2019: YouTube’s Trending section disadvantages creators but publishers see long-term value on platform; Nordstrom’s approach to influencer-led product design; DTC brands increase marketing budgets at higher rate than traditional retailers; the origins of the term “creator”
Here’s what’s worth knowing this week:
Now Trending on YouTube: Publishers
A new study has discovered that established media outlets have an easier time hitting YouTube’s trending section than creators on the platform.
The study, which looked at over 40,000 videos made by both traditional media, like MTV, and creators on YouTube between November 2017 and June 2018, found that creators needed to gather around 11 million views on a single video before appearing in the Trending tab. However, clips from TV shows such as the Tonight Show appeared in the section after hitting a few hundred thousand views.
The research also found similar results for channels that YouTube’s internal system categorizes as news: 95 percent of news that appear on Trending is from traditional media. Creators like Philip DeFranco, who was awarded funding by Google as part of an initiative to create better news channels on YouTube, have to achieve a much higher number of views to appear on the Trending section.
What are creators saying?
YouTube creators have demanded the company do a better job keeping the Trending section balanced and many worry that YouTube is unfairly favoring traditional media sources.
As Miranda Mendelson from Slashed Beauty stated, “With [the Trending page] as well as the algorithm continuing to favor the videos from large conglomerates, it becomes increasingly demotivating for creators — as we can no longer expect a certain amount of success for any one video, regardless of quality. The trending algorithm is supposed to factor in the amount of views a video has gotten within the first several hours of posting, which a traditional media source has the upper hand at with factors such as celebrity guests, advertising budget and syndication by embedding on their websites and social media. ”
Given YouTube’s track-record of previous brand-safety issues, it is a noteworthy strategy that YT is amplifying brand-safe content from traditional, known publishers users already trust. But it’s imperative that the platform find the appropriate balance between high-profile creators and brand-safe content. While it makes sense that YouTube is initially being selective about the content that appears in Trending (and is currently prioritizing ad budgets over creator experiences), it’s important to note that YouTube does see creators as a part of its core content strategy. Notably, in a letter to creators, YouTube CEO Susan Wojcicki admitted the company could do better, promising creators that 50 percent of the section would be creator content going forward.
In this vein, the emphasis on brand safety can also be used as an incentive for creators. While creators are provided the freedom to create whatever they want on their own channels, if they want to be considered for higher-visibility placements (and greater opportunities for monetization) they also need to acknowledge the business of YouTube’s ad-dependent ecosystem at a deeper level. As much as viewership matters, if creators want to get paid, a brand-safe reputation matters just as much (if not more).
Not Unrelated: Publishers See Long-Term Value on YouTube
According to a new survey from Digiday, 30 percent of publisher executives said they believe YouTube offers the most meaningful long-term revenue opportunities for publishers, beating out Facebook and Google AMP, each with 24 percent of the vote, and Instagram and Apple News at 8 percent and 7 percent.
Unlike platforms like Facebook and Snapchat that have infamously over-promised new sources of income and under-delivered (i.e., Facebook Watch, Snapchat Discover), ad payments from YouTube have remained a constant source of revenue for publishers.
Additionally, YouTube has also released products to specifically maximize publishers’ ad revenue, like the Players for Publishers, which allows publishers to embed YouTube’s video player into their sites and keep 100 percent of the ad revenue. Publishers have also cited YouTube as a tool to fuel their subscription business – noting the “intentionality” of the viewership on the platform as a driving force.
Nordstrom’s Influencer Collaboration Model
Nordstrom continues to push the envelope and evolve the ways in which it partners with influencers, working with mega-influencers on a variety of exclusive product collaborations. Most recently, Nordstrom collaborated with Rachel Parcell of Pink Peonies to expand her personal dress line with a collection sold exclusively on Nordstrom.com and in-store.
Most famously, Nordstrom rolled out its first influencer collection in September 2017 – a collaboration between Arielle Charnas of Something Navy and Nordstrom-owned line Treasure and Bond – which brought in $1 million in just one day. Chanas eventually ended up signing a multi-year licensing agreement with Nordstrom and her back-to-back collections last fall became the retailer’s most successful partnership ever – driving an estimated $5 million in single-day sales and beating past collabs with Rihanna and Beyonce.
What’s Nordstrom saying?
“We work with influencers on a regular basis outside of just product collaborations, so these partnerships tend to be an organic extension of an existing relationship. Once we identify an influencer who we know is an organic fit with our brand, we explore ways to evolve our partnership. We prioritize identifying Influencers who share in our goals of inspiring customers through relevant product across our price and style spectrums.” – Jennifer Jackson Brown, EVP, President of Nordstrom Product Group at Nordstrom, Inc.
TLDR; Partnering with influencers to launch new product lines or services is a win-win for brands and influencers. In fact, just last month, Revolve launched an exclusive line with blogger Aimee Song of Song of Style and outlined plans to continue to create products together to “create and grow each other’s brand.” For retail brands, partnering and co-creating with influencers not only has the potential to be an astronomical revenue driver, but also can inform internal strategy, research, ideation, and relevancy to curb the hemorrhage of store closures.
For influencers launching influencer-to-consumer brands, partnering with legacy retailers like Nordstrom that can offer the benefit of a national brick and mortar retail footprint can add offline scale, greater consumer reach and improved opportunities to buy (especially since the majority of consumers still purchase in-store).
DTC Brands’ Marketing Budgets Skyrocket
According to a new report by Commerce Next and Oracle, 78 percent of Direct-to-Consumer (DTC) companies increased their marketing budgets from 2018-2019, a rate “dramatically” higher than traditional retailers, in which only 60 percent reported increasing their marketing spend.
Nearly 45 percent of DTC brands named “achieving profitability at scale” as a top barrier to meeting 2019 marketing goals. In contrast, less than 18 percent of traditional retailers named this as a barrier. Additionally, both traditional retailers and DTC brands cited customer data platforms (CPDs) and personalization technology as the leading technologies marketers are prioritizing in 2019, regardless of their business model.
With all the access to data that many DTC brands have, it still exists in thousands of places. While CDPs offer the promise of a unified view of the customer, and with better personalization, the bigger goal here is the ability to deliver unique experiences to each consumer – including influencers. As marketers go through this process to transform their customer experience in this way, the opportunity to design an elevated influencer experience becomes possible.
“These people [Creators] were more than on screen talent. They could write, edit, produce, do community management, and were entrepreneurs.” – Tim Shey, Co-Founder of Next New Networks
TLDR; In discussing the origins of the term “creator,” Tim Shey, who worked at YouTube at the time, needed to find a better name for these individuals than “partners” – as he needed to find a term that was wide enough to encompass their many roles and backgrounds, but still unique enough to differentiate them from traditional Hollywood talent. Shey and his team at YouTube developed the term “creators” to refer to these people and from 2011 the term stuck. For the full story of the term’s origins and creators’ point-of-view on the term, check out the full article here.