YouTube is a big part of Google and Alphabet’s success.
How could it not be—with more than 2.6 billion active users (as of April 2022) and over 50 million subscribers in the world, YouTube is second only to Facebook when it comes to monthly average users. A quarter of the world’s population uses YouTube every month.
Let’s say that again—one fourth of all the humans existing on Earth use Youtube every month.
It’s no wonder that advertisers are spending big on both gaming and YouTube.
Through the first 4 months of 2022, advertisers have spent $12b on YouTube ads, representing an increase of 325% from what they spent during the same time in 2021.
Another global statistic that might come as a surprise—even more than YouTube users, an estimated 3.2 billion people are gamers.
That’s around 40% of the people on the planet. And if you look at that number through the lens of the Internet-using population, it vaults to nearly 65%.
In 2020, during the early days of the pandemic, people watched 100b hours of gaming videos across more than 40mm channels.
It’s no surprise, then, that advertisers are taking notice and allocating some serious dollars to gaming channels. Many of the ad dollars from Q1 went to ads that played alongside videos on the millions of YouTube’s active gaming channels, a number that’s rising as gamers flock to the platform.
Here’s what that spending looked like through April:
It’s going to be darn near impossible to knock Music channels out of the top spot as advertisers’ favorite channel type. Through April, 41% of YouTube ad dollars went to these channels.
That said, Gaming channels are making a name for themselves.
In the same amount of time that Music channels attracted $3.2b, Gaming channels grabbed $1.3b or about 17% of total spending.
Although a sizable gap remains between Gaming and Music channels, that $1.3b in spending does bring Gaming channels in line with Society & Culture and ahead of Kids, and Ent. & Movies.
Despite coming in at #2 in spending, Gaming channels led the pack in terms of growth, increasing by 500% YoY from 2021.
To put this growth into perspective, spending on Music channels increased by 273% during the same time period.
For YouTube, the increase in spending on Gaming channels aligns not only with the popularity of gaming on YouTube—in Q1 2022, people watched 1.13b hours of video on YouTube Gaming Live with an average of 523k concurrent viewers—but with the overall surge of eSports.
In 2021, Statista valued the global eSports market at more than $1b or 50% more than it did in 2020, growth undoubtedly caused by the increased time spent indoors during the pandemic.
YouTube continues to solidify itself as a player in the gaming community, both by improving YouTube Gaming Live to compete with other gaming platforms like Twitch and by enhancing its ad capabilities to make it easier and more effective for these advertisers to reach this audience. Safe to say, we can expect more ad dollars to follow.
Are Bots Buying Ads for Media & Entertainment Advertisers?
The staggering number of ads Media & Ent. advertisers bought between January and April is almost unbelievable.
So unbelievable that you may be asking yourself: Is it even possible for humans to buy that many ads? Bots must be involved, right?
Through April, Media & Ent. advertisers spent nearly $450mm on ads on Gaming channels, representing about a 500% increase YoY.
Even more staggering is the fact that these advertisers spent more than double that of the next highest-spending category, Tech.
However, when you look at which Media & Ent. companies accounted for much of this spending, the high dollar mark makes sense.
Unfortunately (or fortunately?), no robots were involved.
For these companies and many more, YouTube’s Gaming channels give them the opportunity to take advantage of YouTube’s proven ad capabilities and do so in a corner of the Internet with a refined audience.
Although gaming knows no age limit, it leans toward younger generations—38% of video game players are between 18 and 34.
Combine that with YouTube’s aggressively skewed younger audience—95% of 18-29 year-olds and 91% of 30-49 year-olds use YouTube—and these advertisers have a crystal-clear picture of who’ll see their ads.
Pharma Advertisers Continue R&D in Digital
For better or worse, pharma advertisers aren’t always the most future facing.
Between strict patient privacy laws and the relatively thin ice on which their world sits, these advertisers have historically steered clear from digital ads.
But, as the healthcare world, including pharma, goes digital from both an HCP and patient standpoint, pharma advertisers are getting their feet wet.
In 2021, digital ad buys from pharma companies increased by 60% YoY.
On the heels of a busy 2021, pharma advertisers dove deeper into YouTube’s gaming community, increasing their spending on these channels by almost 700% YoY.
While pharma advertisers just cracked our list of top spenders and are still lightyears from spending anywhere close to other industries, the very sighting of them on this list points to their evolution and willingness to shift their strategies in the best interest of their target consumers.
It may seem insignificant, but this spike, coupled with increased spending on other digital formats and decreases to print spending, which fell by 22% YoY, could signal that the long-overdue shift to digital may finally be upon us.
Proceed with Caution?
While there’s no denying YouTube’s run as the top dog in the digital advertising world, recent times have shown us that it isn’t invincible.
Ahead of its Q1 earnings report, Alphabet announced that YouTube grew by 14%.
Although most companies would be thrilled with such growth, analysts estimated that YouTube would grow at a 25% clip.
YouTube’s miss points to a weary future for digital advertising and makes it clear that the platform—and its advertisers—may be hit hard by inflation and the market’s general uncertainty.
On top of the market’s condition, recent updates have given YouTube users more control over the ads they see.
In the grand scheme of things, this is great. Any step to improve the online experience is one worth making.
But handing more power to users puts added pressure on advertisers to deliver thoughtful and targeted campaigns, which is easier said than done.
Still, there’s plenty of reason to be optimistic. After all, with over a quarter of the global population heading to YouTube regularly, the impact for advertisers is enormous.
While the market is unpredictable right now and some things are left to be seen, we know two things for sure: Gaming is here to stay and YouTube’s Gaming channels will continue to be a unique opportunity for advertisers.