Ep 577: Why Content Targeting on YouTube Is Beating Cheap CPVs

0:00Dougie:We should care more about the content that people are consuming when we are placing ads on that content than necessarily the interests of the audience that we're trying to target. No matter how prescriptive you are, no matter how many scripts you run to exclude certain bits of content, you're never going to escape all of it. So I've just kind of pivoted the mindset to focus more on showcasing on quality content, but also content that just aligns with the brand and the personas that you're targeting.

0:50Eric Dick:When a personalized homepage turns prospects into customers, it's utter marketing bliss. Contentful helps you create tailored omni-channel experiences without working overtime. No stress, no limits, only possibilities. Get the feels at contentful.com. It's All Killer, No Filler. I'm Eric, and I'm here with young Douglas. You're not that young, I guess, anymore, but you lead the Pilot House Google team. Welcome to the All Killer, No Filler podcast. How are you doing, Dougie?

1:19Dougie:I'm doing well. Thank you for having me, as per usual. And Young Douglas, I like. I'm closing in on 30, so I'll keep Young Douglas as long as I can.

1:28Eric Dick:Well, you're sub-30, then you definitely qualify as Young Douglas. So today we're talking about Google. We're talking about some of the shifts happening in the ecosystem and why targeting based on what people watch is outperforming, targeting who Google thinks these people are. What's your overall thesis here, Douglas?

1:46Dougie:Yeah, my thesis is that we should care more about the content that people are consuming when we are placing ads on that content than necessarily the interests of the audience that we're trying to target. I think when you target content, you're being much more prescriptive about the interest you're showing an add-on as opposed to when you're looking at targeting people who like sports. Why not focus in on content that you know is sports related, right? So, yeah, we've definitely found some interesting results. Yeah, a bit of a change in mindset on that front.

2:29Eric Dick:It's age-old stuff. Funnel congruency. We're seeing it across every platform, you know, as we talk about different kinds of audience avatars and making sure that you're building your, you know, your ad campaigns around these right down to the post-click experience as well. So it makes sense that it's working in the Google environment. Well, as well, where does YouTube Select come in? Because this is one that's interesting to me because I've only, back in the day, I've advertised on YouTube a little bit. My biggest problem, as we've talked about on the platform, was just the sort of more indiscriminate spend that would happen or the spend that would happen on really low-quality toddlers who are asleep watching something or really low-quality inventory bleeding into this.

3:09Eric Dick:So what does YouTube select, I guess?

3:12Dougie:Yeah, so YouTube select is essentially lineups of the top 5 % of consumed content on the platform. So it's essentially premium YouTube inventory, and it is deployed via lineups of channel subsets as opposed to being deployed towards any content on the platform. You can still align it to particular demographics and what have you, but primarily it's aligned to content at the end of the day.

3:41Eric Dick:How much more expensive is it?

3:42Dougie:It is pretty pricey. The more you layer on the demographic details, the more of a premium you're charged as well. So if, for instance, you're a broad appeal brand that can serve to demographics from 18 through 65 plus, then you're going to be able to serve at a cheaper rate. However, if you're being very precise about the demographic you're targeting, you're looking at between$40 and$60 CPMs. So it's pretty hefty, but we are, despite those higher CPMs, seeing much stronger measurable performance from this work than CPMs that are 10 times lower. And it is somewhat intuitive, right? Like you're paying for quality, you're going to get more quality performance.

4:26Dougie:I think that there's just been a false perception that if you buy enough eyeballs, it's going to come out in the wash and you're going to see performance. And I don't fully believe that's the case if you go too far down the quality ladder. And YouTube has a very long quality ladder. Absolutely. Like we've talked about previously, to your point as well, even earlier on in this very podcast, you have content being consumed passively on YouTube, you have it being consumed by people who share a device who might not even be the intended target for the ads being served on that content. And Google knows this.

5:04Dougie:So when you go in, you say, hey, Google, give me like a one cent or a 10th of a cent CPV or a$1 CPM, despite you being extremely stringent on the parameters for, or hey, I just want to go after affluent men in Minnesota, you will still get that in terms of what's reported back to you in the platform. But that doesn't mean that the people you serve to were engaging with the content at that very moment. So that's where I see, or I have some concern is that people are going in, they're setting up these high view rate, low cost campaigns, and they're saying, hey, look at all the eyeballs I got. And I see that as being minimally impactful to the back end at the end of the day.

5:44Eric Dick:I'm one of the people that quite often uses a YouTube video to fall asleep. And I would imagine, besides the psychic driving value that you'd get from being in my ears while I sleep, you're not getting as much value from that.

5:56Dougie:Yeah, absolutely not. So I've spent hours and probably days at this point going through placement reports for different brands that we've audited, for our own brands. And you just can't, no matter how prescriptive you are, no matter how many scripts you run to exclude certain bits of content, you're never going to escape all of it. And so I've just kind of pivoted the mindset to focus more on showcasing on quality content, but also content that just aligns with the brand and the personas that you're targeting.

6:28Eric Dick:Okay, so let's talk about it. So what has a successful campaign structure kind of looked like leveraging this YouTube select inventory?

6:34Dougie:Yeah, so the campaign structure is honestly not a significant part of the work. Most of the work comes from doing the work before you launch the campaign. It's diving into, okay, where is our consumer? What do they care about? The better you understand who you're trying to target, the more insight you can gain from Google working with your reps. If you're of a reasonable stage of growth, you can gain insight into what type of content they're consuming on YouTube down to the very specific channels that are more highly indexed as compared to the general population. It's almost that pre-campaign launch work that is more important than the actual campaign launch.

7:15Dougie:The campaign launch itself is almost similar to a TV flight, to be honest. It is, that's another point of clarity is it's not exclusively flight based, but YouTube select is typically deployed in flights as opposed to daily budgets and adjusting bidding. So yeah, I would say that it's less so around hacks with the campaign setup and more so around doing really deep strategic work, understanding your customer and what type of content they're consuming and feeding those insights back into campaign build in the first place.

7:49Eric Dick:I was going to say, it sounds like, like I've heard a lot of good things about streaming and it sounds like this is a filter to kind of give you a bit more of that experience. It's interesting that they run it in flights. Talk to me more then about the content strategy with this content targeting. How many of these YouTube select sites, like, are you going right down to the streamer level or are you just doing it like, you know, sports streamers and then you make the ad a little bit about sports? Talk to me about how we build content for these, this content targeting.

8:17Dougie:The lineups work. They're pre-made, so we don't have the ability to create our own custom lineups. However, I'll maybe add a tidbit on that in a moment. But essentially how it works is, let's say you have a product that you know resonates with people who are interested in sports, you can serve on the sports lineup. And then the other component that we see a lot in TV advertising, but I think we see less of in YouTube advertising outside of maybe the golf niche. The golf niche on YouTube, the YouTube advertisers there. Tacomo, I think, is one that springs to mind. This is me as someone who's not a golfer, but for some reason consumes golf content on YouTube.

8:54Dougie:You can see that they tie the content directly to the placements. And I think that when we're looking at the actual creative itself, there is a deeper benefit to aligning the creative to suit the content that's being placed on. So the tidbit I'll add to that is, while we can't make custom lineups at this current point in time for YouTube Select, what you can do is still gain the insights from Google or through your own research in the wild to discover, okay, where are my potential consumers consuming content on YouTube? What channels are they watching? What type of content do they consume? And you're still able to use content placements, not via YouTube Select, but via standard skippable in-stream, non-skippable, and use those placements specifically.

9:42Dougie:And I do advocate for going down that route as opposed to targeting based strictly on

9:48Eric Dick:interest. Why do you think Google's making this shift?

9:51Dougie:I don't know if it's entirely a Google shift as much as it is a pothouse shift. I would say the broader shift at Google is certainly towards pushing YouTube and I was going to say DemandGen, but DemandGen just facilitates YouTube via YouTube Shorts and Skippable InStream, what have you. There is definitely a push from Google to direct advertisers through YouTube. It's just more creative. If we look at search and shopping over time, it's going to continue to be more and more automated, less gameable. whereas I feel like creative is always going to inherently reflect strategy to some degree. You've probably heard other people at Pallet House say that in the past, specifically within our strategist team.

10:36Dougie:And so there's definitely an appetite for Google to push YouTube generally. I think they see what other platforms are doing when it comes to Instagram, TikTok, and they want to probably eat into that market share and they don't want to completely lose out on monetizing all of the consumption taking place on YouTube. And so, yeah, there's definitely that push towards YouTube broadly, but I don't think it's necessarily towards placement content. I think they will still advocate for a fair bit of audience-focused targeting as well.

11:06Eric Dick:I guess it just gives them the most leeway, right? They're going to want the thing that they can put the most slush in while still having it pay the bills in a way, if you know what I mean.

11:16Dougie:Exactly. If we say, hey, we just want to target guys who are interested in sports, that's a far broader population than people actively in that moment consuming sports content on YouTube. So they're able to monetize much more based on audiences than they are based on content.

11:31Eric Dick:So did you say you aren't able to customize the creative specifically for this inventory or you are?

11:36Dougie:Sorry, you are able to customize the content. It is the placement that you don't have an ability to customize via YouTube Select. Via standard YouTube, you can pick your YouTube channels, your YouTube videos, whatever, and serve on those specifically. You absolutely have the ability to customize your creative assets yourself, but you don't have the ability to say, I want to pick some sports content and some beauty content. Yeah, exactly.

12:03Eric Dick:Okay, well, give me an example then. I know it's going to be pretty simple, but give me an example of a way that you changed creative to reflect what content was being viewed.

12:11Dougie:Yeah, it was almost. for a lot of the brands that are in our ICP that make video content. A lot of the time, they're making some of this stuff for TV, and then they're sharing it with us. And so it was almost more akin to, okay, we've got creative geared towards grilling and cooking. Therefore, we should place that content on placements that is aligned to the grilling and cooking audience. So in the more recent examples, that has been more the case of we are prescribed the creative and aligning the placement of that creative to the creative content itself. However, I would recommend that if you do have a seat at the creative table, and certainly what we will be advocating for more going forward is if we know we'll be placing on XYZ type of content, we want to have creative that reflects the content that it's being placed on.

13:08Dougie:So it's all about fitting naturally into the platform, right? It's the same story with like UGC on Facebook feeling natural, right? UGC on YouTube feeling natural. Skippable in-stream probably being more akin to TV because it feels unnatural if it's too focused on UGC and too scrappy. But yeah, I think at the end of the day, it just comes down to making sure that the creative reflects the content it's being served on.

13:31Eric Dick:Anything else going on on the Google side of things that you're pumped about? I just saw an ad today, actually, that was for Pilot House that was featured Grayson talking about how Meta and Google work together specifically. This might be its own podcast with both of you, but give me that from your perspective. Why are we bundling more often Meta and Google together?

13:50Dougie:It's just got nice synergy where they're both or both are typically deployed as lower funnel performance based platforms. Obviously, when we think of Google being the most lower funnel, it's branded search, right? you're capturing demand. So it's a demand pull, you're pulling demand in that is already out there in the ecosystem. Whereas Meta does a good job of pushing the message out and creating demand. So it's just got nice synergy of platforms like Meta, TikTok, even YouTube, which is why Google's maybe a bit of a dual threat platform is you have the demand generation component of YouTube and the capture component of search and shopping.

14:31Dougie:And so the demand creation from Meta just synergizes nicely with the demand capture of Google. If you have demand generation without demand capture, you're probably going to be missing out on part of the funnel and vice versa. If you have demand capture, but you're not able to create demand and consideration for your product, the demand capture on its own isn't going to be as effective either.

14:52Eric Dick:And I feel like YouTube Select is a pretty strong evolution for YouTube because it addresses, I think, the quality issue that might hold back some of the bigger partners from scaling there. What's the scale like? That'd be another question. Are you able to really scale up on YouTube Select?

15:09Dougie:Depends on how narrow your population size is, right? Like if you are a pretty broad appeal, for instance, if like to go to my previous example, if you appeal to all age groups and people who are interested in sports, you're not going to run into a huge ceiling being able to scale into that population. That population is very active, consuming content on YouTube. Maybe if you're trying to spend a significant portion of ad spend in a very narrow window, but generally there's pretty significant scalability for some of these broad audiences. If you're too niche, or if you're the type of persona that your product appeals to is going to be very narrow, I would say that you are going to run into scale ceiling issues at some point.

15:54Dougie:But for most of our larger brands, it's not a significant concern at this point in time.

16:00Eric Dick:Well, thanks for coming and giving us these updates on the YouTube ecosystem. Now, go look at our Dynasty Fantasy Pool and figure out what I need to offer you to trade me, Brad Marchand.

16:10Dougie:All right. You know I want him off my team. I'm a Toronto guy through and through. So any Floridan or Bostonian, I'm happy to, maybe not happy to get rid of, but I'll make the trade there for sure.

16:21Eric Dick:And to give the listeners just a little context, I'm challenging in this pool that I've been in for 20 years. I have a chance to win this year and I feel like Marchand is the asset that takes me over the top. You're decidedly in a rebuilding phase, would you say, Douglas?