Ten Things We Are Learning Through Working With Google and YouTube

Video is a tough nut to crack and plenty of big players have been left bloodied getting it wrong. YouTube has made some big claims in the past and failed to deliver, but are times changing?

Oovvuu is in the business of helping broadcasters, content creators and media companies to navigate around the potholes. Some 40 broadcasters and publishers trust us to deliver thousands of shows, to millions of people daily, using a combination of experience, quality curation and machine learning through our partnership with IBM.

In late 2016, we signed a deal to distribute crime shows and mini series to a worldwide audience through YouTube.

A few years earlier, we did a similar deal with Google's giant video hub and found the platform was then not ready to deliver meaningful earnings.

So, had things changed? Were YouTubers ready to watch long form video? How many would watch? Would our shows get lost in the mass of others? How would ad sales look? Would we make enough money for it to be worth the effort?

The only way to find out was to try.

We enlisted the help of Australian company Valleyarm Digital, a multi-channel network partner of YouTube. We liked them, and our reasoning was that they had runs on the board, so they could shepherd us.

Our over-arching goal was to learn how premium content was being viewed and monetised by advertising on YouTube today, and where we should place YouTube in the food chain of video monetisation worldwide.

Oovvuu has a vested interest in knowing this as it has been distributing shows from its partners over multiple platforms for years.

Conventional wisdom has been that the best place to stream quality video for premium CPMs is in premium publishers or on broadcasters' catch up networks. Oovvuu's leadership knows a lot about this, as we have managed video businesses for MSN, News Corporation, Ooyala, SBS and others for a decade.

We also know this model is being challenged, both by the limitations of some premium publishers and broadcasters, who can be overly wedded to traditional business models, and by the claimed rise of YouTube and others. So was the rise real?

While recognising it's still early days, this post is about sharing some of our findings.

We are sharing because the media industry has much to gain, and too much to lose, if the global video market fails to achieve its potential. Video consumption is soaring. Our partner IBM has pegged the market at $105 billion within two years.

So, is YouTube a friend or a foe? This is what we discovered.

1. We expected more people would watch our videos on YouTube than on premium publishers. After all, it has a reputed audience of a billion viewers. But how many more? And would the uplift be meaningful?

In a word, yes. YouTube is so far delivering 24x more views per month than even our largest media partners. This uplift is in line with our earlier deal a few years ago, so we believe this traffic can be relied upon. Is it meaningful? Well, that depends on who's watching, whether they are attractive to advertisers, and whether Google can sell the ads? Let's find out.

2. So who were these viewers? What did we know about them? What would YouTube and Google share about them given their reputation for secrecy and obfuscation?

It turns out, quite a lot, and that was a pleasant surprise. We found the majority of our viewers were women (57%) and the largest age group was aged 25-34. There were far more women watching now than during our last trial, suggesting female viewing is on the rise. In a further plus for YouTube, finding this female audience is proving elusive for most publishers; they are highly sought-after and attract higher yielding advertising. Some more learnings on advertising later.

3. So YouTube could deliver viewers in volume and in interesting demographics, but were these viewers engaged? Were they interested in watching a TV show or were they seeking a short form fix?

* Author's aside: I spend a lot of my time trying to kill the myth that people only watch short videos on the internet. The evidence does not support this. Long form viewing and the mid roll advertising it generates, is the fastest-growing segment of the video market, which is why we focus on it.

Back to whether YouTube viewers were engaged. This was our biggest surprise. YouTube has long promised that viewing durations were growing and were confident the audience would repay the effort with their attention if more quality long form videos were uploaded.

The evidence we have seen so far supports their assertion. The average viewing duration of our 52-minute episodes was 23 minutes and 10 seconds. That is well in excess of anything we have seen on our global publishers to date - and this is critical if the mid-roll ad is to become the driver of the coming video ad economy.

Premium publishers would do well to heed the alarm bells sounding here if they aspire to remain relevant. Their main defence to YouTube has been that it's watched by kids with attention deficit disorder. The evidence now suggests otherwise.

4. Our next question was the devices mix. What were people watching YouTube on? The common opinion is that it's all about mobile and the desktop is dead. Was that true or false? Here are the facts; you decide.

Desktop viewing was the largest viewing device at 45%, and commanded an impressive average duration of 24 minutes. Mobile phones were next at 23% and a duration of 19 minutes. Tablets followed at 15% of viewing and 25 minutes. Smart and connected TV were an impressive 12% and had the longest engagement at 29 minutes. Games consoles were 5% and 25 minutes.

Notable here is the growth of smart TVs. When we last trialled this two years ago, TVs were just 2% of total viewing but just beginning to show a rise. Getting to 12% in two years means they are the fastest-growing device for usage and achieve the longest duration. It tells us it is time to consider the smart TV in the ad-funded streaming mix.

5. Where are people watching? What's the geography? The shows we are streaming on YouTube so far are very Australian in focus, so did they have international appeal? And if they did, where were people watching and could that tell us markets we should focus marketing and sales efforts on?

Unsurprisingly, Australia led viewing (and interestingly was far more strongly male-skewed than anywhere else). But it did not lead by much. Hot on the heels was the US (which was very, very female-skewed), then the UK, Canada and New Zealand.

6. So lots of people are watching, they are engaged, they are all over the world and all over the device map. How were they finding our videos? How can anyone be confident their show will be found amid the tsunami of content on YouTube?

This was one of our biggest worries. We were concerned our quality shows would just be swamped amidst the cornucopia of choice.

Victor Gugger, MD of our YouTube partner Valleyarm, responded: "With 300 hours of video being uploaded every minute onto YouTube (their stats), it becomes a matter of ensuring that the billions of eyeballs going to YouTube daily get directed in your direction. It's it is not just a matter of sticking a video up there and hoping for the best."

Again, the secret is working with those in the know.

With Valleyarm's help, we got our video into the right places. And it turns out that the majority of views to our content came from episodes being recommended in the right hand column, next to others' videos (not unlike The Mail Online's right rail of death).

It turned out, our show was most likely to be chanced upon by someone watching something else. So, you'd expect them to be only peripherally interested. Right? Wrong, it turns out. Viewers who found our shows this way watched for 24 minutes on average. Perhaps quality programming does count for something.

Search was the second most likely way to be found and searches that lead to streams generated viewing durations of 21 minutes.

Next was playlists - 214 people saved our show into their playlists. Another 300 have subscribed for updates. And when they playlisted, they watched for 25 minutes. These are all impressive numbers and were a pleasant surprise.

7. What about commenting? It's reasonable to fear that when a show is released to a massive audience, it can attract unsavoury commentary. That needs a lot of moderation and can be damaging to your brand. Would it happen to us?

Well, some wins and losses here. It did attract comments, which is a good thing. And the majority were positive. Indeed, graphically so in some cases.

We took the decision to allow profanities given the relevant show here was about gangsters, but we also put in the effort to respond to comments where we thought it appropriate. Comments can be turned off. This is going to be a consideration as we move forward with more content, but so far, it is not proving a problem.

8. Now we come to the $80 billion question - monetisation. The prevailing view is that YouTube is about kitten clips and frat party videos and CPMs are sub-$1. It's the Wall Mart model of stack 'em high and sell 'em cheap. It used to be true but is it still?

This was our largest surprise and it was a good one so well done Google on turning this around. This is what we found.

CPMs vary significantly by region but the most valuable market for us by revenue was the US. This is logical given this is where most of YouTube's sales effort is focused.

We found we received a AU$25 CPM on pre and mid-roll ads served in the US. CPMs served to Australian viewers watching the same ads in the same shows fell to just AU$14. Premium video ads sold by others in Australia frequently hit $60 and above so YouTube has work to do with the agencies here. The UK was $14.50 CPM. The highest CPMs were in the markets where the audiences were smallest Norway ($33), Switzerland ($36), Denmark ($29) and Sweden ($27).

9. That raises the question of which regions make you the most money? As the concept of geo-blocking becomes less relevant (driven by the global rights deal demands of Oovvuu, Netflix and others), if you combine the audience, durations and CPMs, where do you make the most money?

The answer is that so far, it's the US (43% of total earnings), Australia (30%), UK (13%), Canada (5%) and South Africa (1%). That's an important strategic piece of knowledge.

10. And so to the final question: Should you give YouTube a go? Is Google's all-consuming video hub now a legitimate distribution tool alongside those more traditionally viewed as premium?

Our considered view based on the early evidence we have so far is yes - but with two notes of caution. Firstly, do it with someone with runs on the board. It's what we do, so why not talk to us? What do you have to lose?

Secondly, recognise that in the ever-more fractured marketplace of video, YouTube should only ever be considered a part of your earnings mix. There are many more streams in the sea. Trying to get to them all on your own, will not be cost-effective. We have built our AI with IBM to do this for you. It's mind-blowingly powerful but cheap because the AI does all the heavy-lifting. Again talk to us.

To find out more, visit www.oovvuu.com or contact Ricky on +61 431 478009.