Alphabet, the parent holding company of Google, has announced Google’s financial results for the third quarter of 2015 and YouTube, a subsidiary of Google, is one of the stars of the show. Those of you who want to take a deep-dive into the results can catch up via the Q3 2015 Earnings Call audio broadcast, but we've also pulled out some of the most strategic insights, critical data, tactical advice, and trends in the digital video marketing business that you’ve come to expect from ReelSEO.
Growth of Mobile = Growth of YouTube
During the broadcast of results, Sundar Pichai, Google’s CEO stated that the YouTube app is responsible for a huge growth in mobile watch time on the site. Mobile watch time is also on the increase when it comes to product reviews, and how-tos, with viewers turning to YouTube to get the latest information on the products they are interested in purchasing. But that's not all, mobile watch time has also increased on video content relating to toys and fashion, and alongside the newly introduced shopping ads, YouTube wants to continue to find ways to connect retailers and marketers with consumers who want to buy their wares. Okay, I was there for the announcement of YouTube shopping ads, but note to self: Check out videos about toys in time for the holidays. Oh, and while you’re at it, find out what’s up with apparel videos.
Google’s CEO went on to confirm that 6 of Google's current products - Android, search, Chrome, Maps, Play, and YouTube, have over 1 billion users each. So, Google has six products with more than 1 billion users globally?!? And the newest one is Google Play!?! We’ve looked at how YouTube videos dominate Google universal search results, but I don’t think we’ve examined how YouTube advertisers can target users who have downloaded apps in the same category as theirs; target users who have either paid for apps, or made a purchase within apps; or track their Android downloads without having to add any code at all to their app. Second note to self: Get on it!
Continued Investment in Programmatic Advertising
In Q2 2015, Google confirmed that the top 100 advertisers were spending up to 60% more on YouTube compared to the same period in 2014. During the results, the Google CEO stated that this trend continues, and the number of advertising utilizing YouTube's programmatic solutions options has nearly doubled in the last 18 months and now includes over "80% of Ad Age’s top 100 advertisers". He went on to add that "both mobile and video impressions served on DoubleClick Bid Manager have grown more than 3.5 X since last year", and its a solution that YouTube wants to continue to invest heavily in, both for agencies and for advertising teams.
Ruth Porat, the CFO of Alphabet, confirmed that "YouTube revenue continues to grow at a significant rate with growth driven primarily by video advertising across TrueView and Google Preferred". Okay, no critical data was disclosed, but the growth rate is “significant”. That’s good, right? She also confirmed that the growth in advertising revenue could be attributed, at least in part, to the increase in mobile search and discovery, as well as the use of programmatic advertising by publishers. So, YouTube isn’t the only star in the show. Mobile search revenue and the programmatic business also have big roles. Got it.
During the Results announcement, the question of advertising vs subscription came up, and the benefits and disadvantages of the different business models. Of course, the day before the results call, YouTube announced the launch of YouTube Red, its much-hyped subscription service which not only serves up ad-free content, but which also allows users to watch videos off-line, or with the screen switched off. Pichai confirmed that the new features were introduced to answer a need from certain users for certain functionality. YouTube is constantly adapting to give the users options for what they need from the site, and will continue to do so.
So, one size doesn’t fit all. Figure out what each of your target audience prefer and tailor different content and ads for each one, or at least each “significant” one. That's what YouTube and Google are doing. You can read an edited version of the full results transcript here.