Data-Labor-Technology

In this week’s episode of the Digiday Podcast, Digiday’s senior media editor Tim Peterson, senior reporter Sara Guaglione and media editor Kayleigh Barber share some of the on-stage sessions that they are most excited about and chat through the trends they expect will come up at DPS. 

Digiday will have a variety of coverage around the summit, including session recaps, overheard round-ups and a live podcast recording with Michelle DeVine, svp of programmatic and client partnerships, retail, at BuzzFeed, which will go live on Tuesday, April 4. Stay tuned for more insights coming out of DPS later this month.

Below are highlights from the conversation, which have been lightly edited for clarity. 

The precarious state of programmatic

Barber: There’s almost like a churn-and-burn mentality when it comes to advertising budgets in the quarter. At the same time, though, at the beginning of this year, you saw some of the lowest CPMs, especially in the open marketplace, since the onset of the pandemic. So, despite there being a decent amount of transacting happening programmatically, those rates have just been incredibly low, according to Operative’s STAQ Benchmarking Data, which is what I use to keep a track on the averages for the industry. I’m very excited to hear from BuzzFeed’s [Michelle DeVine] about how their programmatic advertising business is faring. [BuzzFeed] kind of sits in a unique position being partially news, partially lifestyle, partially quiz[zes], I guess, and [taking a look under that hood is] going to be interesting. I just wrote a story about the role of verification data and brand safety, and how that’s been impacting programmatic businesses as well. So hopefully, I can pick Michelle’s brain a little bit on that.

[And then talking] about [publishers’] direct-sold advertising business, I spoke with [Forbes’ CRO Sherry Phillips] at the end of last year about events specifically and how their events business has been doing pretty well. And I think that’s one area of the advertising space that, despite budgets being tighter, publishers are still seeing a decent amount of success with events businesses. So I’m really curious to hear from [Phillips] about the role of direct-sold, and if advertisers are getting a little bit more leeway with those larger budgets and how those will be spent throughout this year.

The amazing and ambiguous AI

Guaglione: [One] session that I’m looking forward to doing is with Josh Jaffe, he’s the president of Ingenio, which owns sites like Astrology.com and Horoscope.com, to talk about AI. With the arrival of chatbots, like ChatGPT and integrations [of that] in Microsoft’s search engine Bing, it’s been really interesting to talk to executives at publishing companies to hear what they think the impact will be on their businesses and [in] content production. So I’m curious to hear from Josh, if their company is integrating AI technology when it comes to publishing and what the company’s thinking about or planning for when it comes to the potential impact of chatbots on their businesses, especially if someone can use ChatGPT in lieu of a search engine. I think it’s going to be interesting if someone can go into ChatGPT and search for their horoscope that month instead of going through a search engine to look that up and find Astrology.com’s website and a page about their horoscope. What impact will that have on trying to get people to come onto their sites, if that kind of takes the role of some search traffic?

Peterson: We’re going to have to put a cap on how many times people say AI on stage, or [have] some sort of filter to make sure that when AI comes up, it’s not buzzword bingo.

Guaglione: It’s so true because it’s so easy to throw that word around. I feel like AI is a buzzword that has been thrown around for years. And maybe right now is the first time that we’re really seeing people taking it quite seriously in terms of what it can do and what it might mean for the publishing business. 

Privacy party

Peterson: [One of the sessions I’m looking forward to is my session with] Mary Mirko from TheSkimm. We’re going to be talking about first-party data and data privacy, [which] in particular has been a pet obsession of mine since 2011 when Sen. Jay Rockefeller introduced the Do-Not-Track Act and I learned about how data was being collected and used online. And this year, there are five privacy laws taking effect in the United States that really upped the stakes for companies that are using [user data]. At the same time, collecting data is becoming even more important for publishers because of the third-party cookies going away at some point. But there’s also the point to be made of Apple’s Safari and Mozilla’s Firefox, third-party cookies are pretty much already toast. So publishers are having to deal with this anyway.

Some esports teams have fielded all-female teams for over a year, but there remains a tremendous gap between the total number of female esports pros and the number of male players competing full-time in the industry — and that’s not to mention the gulf in the prize money awarded to female players versus male players. In the United States, female pro players earn an average of $3.42 for every $100 earned by male players, according to a January report by Best Online Casinos. Per the report, every single one of the top 400 highest-earning esports players in the world is a man.

“If women need to go actually earn a salary living off of esports — well, they’re not winning prize pools, and they’re not getting deals on the side to be a creator or an influencer, so it doesn’t really present them a fair nor appetizing opportunity to actually work in the industry,” said Kelly Sanders, the head of strategy for the esports betting platform Thunderpick. “So unless big changes are implemented, it’s going to be a forever cycle — and that’s why it’s great that a lot of these different groups and people are doing these big changes for females in esports.”

The tide does indeed appear to be gradually turning in 2023. Bolstered by the presence of leagues such as Valorant Game Changers, ESL Impact Circuit and Riot Games’ planned women’s League of Legends league, major esports teams are once again starting to sign all-female squads.

There are clear financial incentives for esports organizations to lean into female esports. True, creating more opportunities for women to compete is a reward in itself — but many of these companies are beleaguered by investors clamoring for profitability, and they rarely take an action unless they can benefit monetarily from it. For now, brand partnerships are still the primary source of revenue for most esports orgs, and female esports teams represent new inventory for a spread of women-focused potential sponsors. 

“Female gamers are not a separate class, and they’re not looking for kid glove treatment, said Emily Ketchen, global CMO and vp of Lenovo’s Intelligent Devices Group, in a 2022 interview with Digiday. “Our research showed that 88 percent of women play competitive titles — 66 percent play shooters — so there is a real opportunity to celebrate female gamers and to put them at the center of our work.” Ketchen said that the presence of female Valorant teams at both G2 Esports and Complexity Gaming were key factors in Lenovo’s choice to sponsor those esports orgs.

Aside from the added partnership inventory, fielding all-female teams also gives esports organizations opportunities to sidestep the brand safety issues that have pervaded the industry over the past year. In September, G2 Esports faced blowback from fans and partners after its then-CEO Carlos Rodriguez doubled down on his friendship with the anti-feminist influencer Andrew Tate. Bringing on an all-female “Counter-Strike” team is one way for G2 to signal its continued support for women in gaming despite these unsavory associations. (G2 Esports representatives declined to speak to Digiday for this story.)

“Being able to have a diverse cast, whether it’s on broadcast or even the players themselves, will truly represent everyone who’s playing the game,” said Kacey Anderson, a streamer and content creator who works as a host for eMLS. “Because literally everyone is playing the game — all ages, all genders — and so it’s nice that we can showcase that.”

Recent studies have shown the adoption of video podcasts among listeners. A poll from Morning Consult released in January found nearly a third (32%) of Americans prefer listening to podcasts with video — that goes up to 46% among podcast listeners who listened to a podcast in the last month. One in three podcast listeners who were polled said YouTube is their most preferred podcast platform, followed by Spotify and Apple. 

A Podtrac study from last May found 22% of the top 250 podcasts from its rankings post video podcast episodes with people talking on camera to YouTube, and 11% post audio-only episodes with a static image or waveform visual.

In its fall 2022 podcast report, Cumulus Media and Signal Hill Insights found that while 43% prefer to listen to podcasts without any video, 28% actively watch video while listening and 29% play video in the background or minimize on their device while listening. Interestingly, podcast newcomers (who started listening in the past year) were more interested in watchable podcasts — only 42% said they prefer audio only, compared to 47% of those who started listening to podcasts four or more years ago. Weekly podcast listeners who prefer to watch podcasts skew younger and more male than those who prefer audio only, the study found.

But is the cost worth it?

The cost of uploading an audio podcast onto YouTube with a static image or a sound wave visualization is one thing — it’s another thing to produce high-quality video, such as multiple video shots of a podcast recording. (For what it’s worth, a YouTube spokesperson said video and audio-only podcasts are not weighed differently by the platform’s recommendations algorithm.)

Betches Media is planning to have more podcasts with video content on YouTube within the next 90 days, said CRO David Spiegel. The challenge with producing full video episodes is the need to hire producers to film people onsite and edit the video to match the audio recording, which can “run up costs,” Spiegel said, later adding, “The opportunity cost and labor involved has to be seriously thought about.”

Last October, Betches Media brought the “U Up?” podcast to YouTube – its first foray into producing an in-studio podcast video, Spiegel said in the Digiday Podcast. The channel has grown to over 7,000 subscribers. Betches will continue to promote its podcasts with short-form vertical video, such as YouTube Shorts, and will “eventually staff for more full episode videos on a show by show basis,” Spiegel said. Betches has hired 15 people across the company in the last month, he noted. 

“I don’t want to film [an interview over Zoom]. I don’t think this is a good experience,” he said.

Another podcast executive — who traded anonymity for candor — said their team was still undergoing a cost-benefit analysis of creating fully-produced video podcasts. 

“If you’re significantly adding to your production costs to have a very polished-looking video element, then at a certain point that might make it harder to have a profitable podcast,” the executive said.

Some of their company’s podcasts are posted on YouTube with static images or waveform visuals. The company is testing filming some of their chat shows over Zoom with higher-quality web cameras. 

“We’re curious to see how those perform… But the question we’re asking ourselves is, how good of a test is this, if we aren’t going all the way and doing proper camera and lighting and everything?” the executive said. “We’re debating what a real test looks like, and if we need to invest a little more to see if it makes a big difference on [YouTube].”

Pushkin Industries recently upgraded their video podcasts on YouTube from moving sound wave animations to custom moving animations, said Eric Sandler, vp of marketing at the audiobook and podcast company. Pushkin also publishes podcast videos with transcriptions.

“We’re trying a bunch of presentations to see what’s sticky with the audience,” Sandler said. “But it’s not custom video or anything like that… It’s definitely meant for leanback listening, not [for] someone actively staring at it,” he added. Pushkin Industries has 109,000 subscribers on its “Broken Record” podcast’s YouTube channel.

As platforms like Spotify begin to integrate more video, Sandler said he sees “an opportunity to try full video episodes and it’s something I look forward to experimenting with.”

Despite podcast executives’ plans to test out more fully-produced video podcasts in the future, one of the executives who spoke with Digiday was worried about the impact a shift to video might have on the medium itself.

Podcasts are “very intimate, and they’re very unselfconscious because you don’t have a camera in your face most of the time… And if all of a sudden you have lighting and cameras and you have hair and makeup, you might lose some of that,” the executive said. “You don’t want the fundamental creative of the thing to suffer, just because you’re trying to exploit it on other platforms.”

They added: “But then if that could help you find millions of more listeners, well then maybe that’s a worthwhile trade off. I think that’s what we’re all going to have to weigh as this continues to evolve.”

“We start to trust [verification firms’] metrics as a currency,” the buyer continued, but that currency seems to have a poor exchange rate when it eventually lands in the pockets of news publishers.

Many publishers have been fed up for a while over how much their programmatic inventory gets demonetized by verification firms’ ratings or by over-generalized keyword blocklists, but the latest hits to programmatic pricing overall seems to be piling on. What’s more, in the past year, the war in Ukraine, the overturning of Roe v. Wade and coverage of the pending recession have joined the keyword block lists, and between that and the rise of contextual targeting, news publishers worry that the problem will only be exacerbated by the layers of optimization that buyers apply to their programmatic buys going forward.

In January, the average cost that an advertiser would pay per thousand views of their ads (CPMs) was $1.21 in the open marketplace — the lowest it’s been since May 2020, per Operative’s STAQ Benchmarking Data. Comparatively, the average CPMs for private auctions (PMP) was $3.46 in January and $10 for programmatic guaranteed deals (PG) — the lowest monthly averages since June 2020 and August 2020, respectively. The four-week average CPM for the open marketplace in February rose slightly at $1.28, but the average PG CPM fell to $9.74 and the average PMP CPM was down to $3.20, indicating that publishers’ programmatic revenue is still being impacted by the economic slowdown. 

So while being a news publisher in the open programmatic marketplace has never been easy, the past year it seems to have gotten even more difficult to compete for advertiser dollars in those venues.  

“As an overall news publication — despite having food sections, sports sections and entertainment sections — we have been faced with, especially in the past year, a lot of buyers just not wanting to run on a news publication at all. Or [they’re] getting a corporate mandate to not run on news publishers, despite section targeting and or contextual targeting,” said Camille Murphy, LA Times’ executive sales director who oversees programmatic guaranteed and private marketplace advertising within the company.  

A nuanced problem for news publishers

The hits to revenue because of this are not minute, according to Romero. When the Black Lives Matter movement was re-sparked following the murder of George Floyd in the summer of 2020, he said that paper’s coverage of the movement led to that content being under monetized by 30% because of blocklists.  

On average, The Guardian’s U.K. programmatic business sees a 26% decrease in its CPMs when the content is flagged as unsafe but when fill rate is taken into account, that number becomes worse at 37%, according to Katherine Le Ruez, the director of commercial strategy and operations at The Guardian. And on an average day, about 1% of the site’s inventory is flagged as unsafe, she added, but during the recent earthquake in Syria and Turkey, that percentage increased to 10 to 15%.

Increasingly, there’s been a lean toward contextual targeting in the programmatic market, which is conducted through verification firms scraping publishers’ sites and then categorizing the data in a way that Le Ruez said “could never be accurate” when done by machine learning on its own.

Third parties “will sell things like sentiment and emotion targeting but one person’s election win for Donald Trump is a great triumph [while] for another person it’s a total disaster. So the idea that you can apply that level of human reading by an AI is obviously a challenge,” Le Ruez said. 

Beyond the actual categorization and grading of The Guardian’s content, Le Ruez claims that the ongoing data scraping that occurs from third-party verification firms, which siphons their content into the various brand safety measurement funnels, creates a variety of issues on the publisher’s backend. These issues include slowing down page and ad load times, which can impact user experience and ultimately viewability and monetization of ads. 

“It’s not something that we offer through our direct business, because we don’t believe it really stands up. So you have these third parties offering services that we don’t really believe in, using our website, our intellectual property, without necessarily having our permission, and selling the services directly to our customers without us endorsing it, or indeed, making any money from it,” said Le Ruez. 

The Guardian and The Independent both have contracts with IAS while the LA Times has a partnership with Verity, GumGum’s contextual brand safety product. And it appears that one contract is plenty. 

At the end of the day, however, those intermediaries are involving themselves in publishers’ advertising businesses with or without permission. Advertisers come to each publisher using different verification firms and DSPs so the brand safety ratings and viewability data from every firm is going to impact their ability to sell programmatically to some degree.

And the more that buyers try to verify the data on their end to their specifications, layering that on top of the publishers’ own verification strategies can lead to inconsistencies within the data sets causing a reduction in inventory that a publisher has to sell within a DSP.  

“People are having trouble letting go of those keyword lists, even though they’re also trying these contextual targeting tactics and I [think] you need to separate those tactics and test those separately. But I don’t think that’s happening as much as you would think,” said Murphy. 

The Independent is letting the clients’ data sets take precedence to limit the amount of layering that takes place. 

“Where we’ve seen that rub is when a client’s appending data, we’re appending data, the datasets aren’t matching [and it] becomes essentially like a clog in the pipe,” said Blair Tapper, svp of The Independent U.S. “Our preference would always be to see to what the client wants, and if they’re appending brand safety on there, we will not also [do so] on our end. If they want us to set it up, we’ll do it on our end. But I think it’s where there’s competing safety tools, that it essentially cross cuts the inventory.”

Buy programmatic directly through us, please

Publishers are hoping to persuade more agencies and advertisers to do more of their programmatic buying directly through them in hopes that the issues of inconsistent brand safety ratings and mismatched data gets resolved before they lose out on that money. 

LA Times has been prioritizing PMP and PG deals since Murphy joined the team, if not before, she said, because the relationships that her team is able to form with the agencies and advertisers is critical for working through these brand safety issues. But recently, PG deals have been even more desirable because that is when her team has the most granular control over targeting. 

“When we [apply Verity’s contextual targeting and apply our own keyword blocklists] through a PMP deal, a lot of times we’re still seeing buyers apply their brand safety targeting, so then it’s doubled targeted and the scale is even smaller,” said Murphy. 

At The Independent, the volatility in the programmatic space has caused the sales team to prioritize direct advertising outside of programmatic, both through video and branded content, according to Tapper. But sorting out the programmatic techstack internally has been a top priority over the past year, she added. 

“We’ve done a lot of work on the site in terms of the [user experience] and so a lot of that has caused us to pause and reprioritize the partnerships that we have with programmatic partners,” Tapper said. 

The Guardian’s strategy for circumventing the blocklist and contextual targeting issues is to continually educate agencies and advertisers about why buying programmatic directly is the better choice for news publishers, and while that’s worked to a degree — Romero said that direct sales in the U.S. increased by 40% year over year in fiscal year 2022 — “we have to come up with a solution for brands and advertisers other than just buying direct,” he added. 

The never-ending campaign 

The ongoing job for Deven Choi, manager of programmatic revenue at the LA Times who oversees the open programmatic marketplace, is to work with the SSPs directly to try and untether LA Times’ lifestyle, sports and entertainment sections from its hard news coverage, but that’s not a perfect solution.

“Even if an SSP does that, there’s no guarantee that the DSP for the end advertiser uses the SSP’s classification method. They might just use a vendor to classify any inventory with a URL from LATimes.com as all news, so it’s all unsafe,” said Choi.

Choi’s team will also go to those vendors and try to convince them to separate out its news content from its other sections and in some cases, they will tweak their models and use contextual models as well as keywords in order to determine brand safety. “That’s helped a little bit, but it hasn’t made a noticeable impact,” he said. 

It comes down to the nuances of the vendors’ models and whether or not they can classify content outside of the root domain. 

The Guardian is also campaigning to limit the access that verification firms have when it comes to data scraping and is also entering into a partnership with a contextual data partner, whom Le Ruez declined to name, in order to have more control over that piece of their business, as well as building a proprietary tech stack for contextual categorization.

For agency execs and marketers who work with startups — which Silicon Valley Bank was known for doing — the past weekend was an “existential experience,” explained Katya Constantine, CEO of DigiShop Girl Media, a performance marketing agency that works with startups and emerging direct-to-consumer companies.

Marketers and agency execs say they spent the past weekend analyzing their potential risks and ties to the collapse, a situation that they will continue to closely watch in the coming weeks. 

“For the past 10 years, we have specialized in working with growth-stage tech startups and tech-enabled businesses,” said Mack McKelvey, founder of strategic marketing shop SalientMG. “The SVB collapse was particularly shocking, given the extensive integration the bank has in the whole start-up ecosystem. While we don’t bank directly with SVB, my immediate thought upon hearing the news last week is that many of our VC-backed clients do.”

McKelvey wasn’t alone in thinking about potential impact. “Our agency over the weekend was focused on understanding any risk exposure, putting measures in place to mitigate further risk and being available to clients that required communications guidance,” said Marisa Ricciardi, founding partner and CEO of strategic marketing agency Ricciardi Group, and former CMO of the New York Stock Exchange. “Our clients are super focused on their own employees and customers in order to create and instill confidence in the market.” 

While the collapse of Silicon Valley Bank in particular has put a spotlight on startups, agencies that work with startups say they aren’t reconsidering doing so now. 

“We aren’t re-thinking any current relationships and we don’t intend to stop working with interesting emerging brands, but will definitely monitor those decisions very closely,” said Ricciardi. “However, it’s a good reminder to stay focused on the importance of having good agency financial hygiene (i.e. accounts receivable management, clear payment terms, rolling financial projections, working capital reserves etc.)”

McKelvey, meanwhile, explained that SalientMG “will always work with innovative and disruptive startups” as it is part of the company’s DNA but that the shop is “watching the whole banking sector this week and we’ve been in touch with several of our VC-backed clients and their VCs.” When asked about potential plans to mitigate risk with changes in payment terms, McKelvey said, “we aren’t immediately changing our payment policies, but we aren’t ruling anything out either.”

Marketers and agency execs say that they expect CEOs and CFOs to be going through financials “with a fine tooth comb to make sure I’m not faced with the same existential risk again,” noted Constantine. 

The collapse also put into perspective the ripple effects of a collapse — even if an agency doesn’t work with a failed institution they could work with clients or vendors who may be then unable to pay them. 

“People are awake to the risk of having all their eggs in one basket,” said Constantine, who added that for agencies who rely on a few clients it makes clear that “having operations dependent on one or two clients is a huge risk for an agency. The need to diversify will be clearer.” 

3 Questions with Brian Killingsworth, CMO at fitness company F45

After more than a decade in business, F45 recently launched its first-ever brand campaign. Why now?

The brand is continuing to expand like crazy and we’re looking at North America as a really emerging market for us that we don’t think we’ve really truly penetrated yet. The company has been really successful in selling franchises and cultivating an incredibly tribal member base. We want to really amp up our awareness level for those fitness consumers that are looking for a solution. This is the year to do it and kick it off the right way. 

How is F45 working to meet its marketing goals?

We did a lot of research as to who our core consumer is of our brand from a target perspective. That consumer over indexed on a lot of the social channels. They over index on streaming. They over index on podcasts and so it was important for us to deliver across those mediums, and be as efficient as possible with this buy. 

We looked at [the media mix] a little bit differently. We looked at three types of media. We allocated 55% of the budget to what we call high efficiency and that includes our social and digital platforms. We look at some of our high reach video platforms as well. Meta, Google all fall under this high effective bucket. Then, 25% of our budget is allocated to high premium. High premium for us is looking at podcasts, Spotify, Hulu, Amazon and that’s a big bucket for us. Lastly, 20% is allocated toward what we call high impact. Those are looking at strategic partnerships that help elevate our brand. A lot of those you’ll see in the third and fourth quarter as we continue to lock down strategic brand fits for us. Specific tactics across those three buckets include YouTube, Meta, Google, Amazon, Spotify [and] digital display, just to name a few.  

What’s the biggest change in this year’s media channel mix versus last year? 

I still think digital is king for us. Our member base does such a great job of amplifying our brand. So just looking at the digital assets we own and operate, we have our own website, we have our own social channels obviously.  –– Kimeko McCoy

By the numbers

The first-ever global live-streamed Netflix show, a comedy special from Chris Rock, is a promising signal of what may lie ahead in the advertising and live-streaming industries as consumers become more and more interested in social media and live content. As per GWI, an audience insights company, consumers in the U.S. like Gen Z are actually less likely than older generations to engage with brands through television ads or online TV shows, which suggests a need to modernize and optimize live streaming platforms and content. In addition to this, GWI found that:

• Netflix (75%) dominates Gen Z’s streaming preferences over Hulu (54%), Disney+ (48%) and Amazon Prime Video (40%).

• Gen Zers watch more streaming services and broadcasts than older generations — viewing content for two hours 13 minutes versus two hours eight minutes.

• A majority of consumers watch comedy, followed by action/adventure (47%), and thrillers (42%). Therefor, Netflix chose to run a stand-up show by Chris Rock over any other topic. — Julian Cannon

Quote of the week

“In real life [experiential marketing] was lighter last year compared to pre-Covid years, certainly. We’re witnessing strong interest and seeing activities that are on-par with previous years.”

— Peter Lewis, chief partnerships officer for SXSW, on the return of experiential efforts at the festival this year.

What we’ve covered

• Netflix is reviewing its ad strategy, considering ‘build or buy’ pivots away from Microsoft
• Fragmented media landscape changes what clients expect from PR agencies
• Digiday’s full special report on social media fragmentation can be found here

So when YouTube told creators they could make money from the ads around their Shorts content earlier last month, they were wary that the revenue on the Shorts videos they produced would help alleviate the money they’ve lost as a result of it.

Shorts gave creators incremental revenue because it was attracting ad dollars from somewhere they would not otherwise be able to access. But those dollars are far from additive for many creators.

It’s only been six weeks since YouTube has offered the ability to monetize Shorts. But creators are far from sold on the idea, according to five talent managers, marketers and consultants, who spoke to Digiday. Collectively, they have more than 60 creators on their rosters.

“The overall impressions and views are drastically up (approximately 60% for the creators we work with) but watch time and revenue have taken a big hit,” said Aniket Mishra, co-founder and CEO of news media company Creator Mail. “Giving a percentage for the decrease is a bit tricky, but I can say they are down by 20%.”

The issue has been highlighted by creators like Brooke Monk (who has 2.02 million subscribers on YouTube) who publicly posted her Shorts revenue stats since last month. A week after Shorts monetization came into play, she noted that she had earned £768.41, despite recording 64.5 million views.

YouTube says it has designed the new Shorts monetization program with those financial concerns in mind. Creators receive a portion of revenue from eligible Shorts specifically in its Shorts feed, after YouTube has accounted for its music licensing costs, based on total views. This is the opposite of YouTube’s traditional method — paying creators based on watch time. So far this tweak is yet to be a net positive for creators.

“If your viewership goes from one million monthly views to 10 million monthly views, but you’re not making any more money, that can be hard on the psyche,” said Phil Ranta, COO of digital talent management company We Are Verified. “We’ve seen many creators’ growth increase between 20% to 50% month-over-month with Shorts, but we have not seen revenue growth associated with that.”

Though arguably it’s still too soon to take these figures as anything conclusive. 

“It’s still early, and we’re focused on bringing together creators, viewers, and advertisers to grow the Shorts ecosystem,” a YouTube spokeswoman said in an emailed statement. “As we all invest in Shorts we expect creator earnings to continue to grow. With Shorts ad revenue sharing, we’re committed to building a long-term partnership where creators can directly share in the platform’s success.”

It’s a stance the company has maintained throughout the ensuing narrative around the new Shorts monetization program. Time and again it has insisted that the growth of Shorts would not come at the expense of long-form content for creators; that audiences who see a creator’s content via Shorts might be encouraged to watch their long-form videos too. 

To support this behavior, YouTube is experimenting with signals from Shorts that will help inform long-form viewing sessions on the platform.  For example, it’s now using a viewer’s Shorts watch history to influence long-form recommendations. This means that viewers who discover a channel in Shorts are more likely to see long-form videos from that channel in the main YouTube recommendations. 

Until these answers materialize, creators continue to wonder how the evolution of Shorts and the subsequent prevalent of short-form video on the platform will further contort their ads businesses. 

Creators’ concerns

“I think the thing people need to look at more is how it [Shorts] is impacting creators’ overall channel growth,” said Leslie Morgan, general manager at Morganglory Consulting. “They have all this short-form content and they’re getting viewership on it, it’s being monetized. But there is still long-form [content] on these creators’ channels.”

Here’s another way to look at this issue. The proliferation of Shorts over the last two years or so has seen some creators see a huge boost in vanity metrics like subscribers and total views. But it hasn’t always translated into something more meaningful like engagement, loyalty or conversions — things that are essential to making money from ads.

It’s no wonder creators are somewhat loath to fully commit to this switch, given what it could mean for everything else they do on YouTube. To say there’s a lot of confusion and underlying frustration among this group these days is an understatement.

Taking matters into their own hands

Some creators are making separate Shorts channels due to the aforementioned concerns over how their audience will collectively shift. As fluffy as vanity metrics like views and subscribers are, they can still be valuable when it comes to closing deals with marketers. An inflated audience, albeit on the back of Shorts, will help do that, or so they think. The problem with this plan though, is it doesn’t exactly chime with YouTube’s own plan for creator content on the platform.

“YouTube is not very bullish on creators creating other channels that are just Shorts channels,” said Morgan. “They want everything filtered into one thing. We’ve had many conversations with them, and again this is pre-monetization, a couple of months ago, conversations were all about why creators should stay on their main channel. [YouTube reps said] ‘Do everything on your main channel. Don’t create a separate storage channel.’ And creators are doing it, and this is where they’re getting now with it. So I want to see what happens in the second quarter.”

There’s a chance that creators could take bigger steps to line up their long-form content with what they post on Shorts. The rationale being that a video podcast that posts Shorts cut from the interviews, for example, could potentially drive more long-form viewership — in other words, the Shorts is a snippet which provides enough intrigue for viewers to seek out the longer interview. So if the Shorts compels the viewer to click through to find or learn more — that’s the benefit.

On the flipside, creators who post individual Shorts that are totally unrelated to their long-form content, or each other — e.g. pranks — may not benefit, because that Shorts content doesn’t urge investigation of the longer content.

“Generally, Shorts are a cold audience approach — you can use it to maximize reach, and once viewers are on your channel, the long-form content can help cater to their needs and help to transition them from views to subscribers, to being part of an audience, to becoming a fan,” said Avi Gandhi, founder of Partner with Creators.

This is according to a Digiday+ Research survey of 112 publisher professionals that found the number of publishers getting revenue from selling products has dropped off over the last two years. And, unlike with affiliate commerce, selling products doesn’t look like it will be a significant area for growth.

Overall, Digiday’s survey found that 46% of publishers get at least a very small portion of their revenue from selling products. But that number has been consistently falling over the last year. Six months ago, 54% of publishers said they got at least some of their revenue from selling products, and a year ago, 60% said this.

Of publishers who do get revenue from selling products, the largest percentage has consistently been those who say they get a very small portion of their revenue from this part of their business — about a quarter of respondents have fallen into this category over the last year. Meanwhile, as of the first quarter of this year, only 8% of publishers said they get a large or very large portion of their revenue from selling products.

And even under very uncertain economic circumstances, publishers don’t appear to have a plan to change this in the coming months. In fact, Digiday’s survey found that far fewer publishers said they plan to put any focus on this part of their business than just six months ago.

Just as with publishers who make money from selling products, the percentage of publishers who plan to put at least a very small focus on this part of their business has been falling for the last year, with a big drop-off occurring in the last six months. As of Q1 of this year, 46% of publisher pros told Digiday they will put at least some focus on selling products in the next six months. In Q3 of last year, that percentage was a full two-thirds (66%), and a year ago it was 70%.

The percentage of publishers who put a very small focus on selling products has remained consistent over the last two years at about 20%, but the percentage of those who put a small focus on selling products fell from 19% in Q3 2022 to just 7% in Q1 2023.

Digiday’s survey found that the majority of large publishers (or those who made more than $50 million in revenue last year) do make at least a very small portion of their revenue from selling products. Specifically, 59% of publisher pros who work for large publishers said they get at least some revenue from selling products.

Of large publishers who make money from selling products, the largest percentage (27%) make a very small portion of their revenue from this part of their business, followed by those who make a small portion of their revenue from selling products, which came in at 12%. Meanwhile, a combined 12% of publishers make a large or very large portion of their revenue from selling products.

Interestingly, an even bigger percentage of large publishers say they will put at least a very small focus on building their products business in the next six months. A full two-thirds (66%) of publisher pros who work for large publishers told Digiday they would put at least some focus on building this part of their business.

Twenty-nine percent of publisher pros said building their products business will be a very small focus for them. But a somewhat significant 15% said it will be a very large focus, indicating that, especially in the current economic climate, big publishers — which generally have more resources available to them than their small counterparts — see the potential in selling products to grow their revenue by any means necessary.

Small publishers, on the other hand, are not as flexible when it comes to adding and building different parts of their business, especially outside of their core function of content creation. Digiday’s survey found that fewer than a third (31%) of small publishers (or those who made less than $10 million in revenue last year) currently get any revenue at all from selling products.

Of the small publishers who do make money from selling products, those who make a very small portion of their revenue from this part of their business accounted for the largest percentage (11%).

And, it turns out, this isn’t likely to change anytime soon.

The same percentage of small publishers (31%) said that they plan to put any focus at all on building their products businesses, Digiday’s survey found. And in this category as well, of the small publishers who will put any focus on selling products in the next six months, the largest percentage (14%) was among the publisher pros who said it would be a very small focus.

In other words, selling products is a very small focus among small publishers, and it’s going to remain a small focus for the foreseeable future.