Retailers' ad spend on YouTube drops by 20%, study says

Dive Brief:

Retailers cut their YouTube ad spend by 20% for the first five months of this compared with the same period last year, according to new data from ad intelligence platform MediaRadar that was provided to Marketing Dive. The top spenders on YouTube year-to-date include Samsung, Toyota, Geico, Disney and Walmart.
Even with the decrease, retail remains among the top three advertiser categories for YouTube. Only 13% of the approximately 200 retailers on YouTube spent more during this period than in the corresponding period last year.
Media and entertainment companies increased their ad spend by 3% during the same period. Over half the channel's revenue this year comes from the industries of tech and media/entertainment. Top channels on YouTube, according to MediaRadar, are: TheEllenShow, Linus Tech Tips, PewDiePie and WatchMojo and WWE.

Dive Insight:

MediaRadar CEO Todd Krizelman told Adweek that he didn't think retail's cut in spending reflects a problem for YouTube. Rather, it's more of a reflection of hard times in the retail industry, he said. In the U.S. alone, more than 7,000 stores are planned for closure this year. It's worth noting that YouTube continues to attract some of the biggest advertisers out there, like Samsung, Disney, Geico and Walmart, underscoring the platform's wide reach. While YouTube faces ongoing brand safety issues that has caused some marketers to pull their spend, buy-ins by big brands suggest YouTube's efforts to address these issues have gained some ground, although the consensus seems to be that it the problem will never be completely eliminated.

Among all their other challenges, physical retailers have to face the asymmetric competition of direct-to-consumer brands and Amazon. Retailers also have a wide range of digital advertising options, some that are more closely aligned with selling merchandise. Almost 70% of marketers used Instagram last year, for instance, and its popularity as a place to sell all kinds of products can be appealing to retailers.

Earlier this week, a report from Juniper Research found that Google's share of global digital ad spend will drop by 1% over the next four years, in part because of competition from competitors like Amazon and Baidu. Amazon, in particular, is consuming as much digital ad spend as it possibly can. Its share of global digital ad spend will grow from 3% last year to 8% in 2023, according to Juniper.

Amazon could even be appealing to retailers, with new research showing that 70% to 90% of the impact from Amazon ads drive non-Amazon sales. Many buyers looking to purchase a product start first on Amazon, making it a kind of de facto ecommerce search engine. As a result, retail advertisers on Amazon can get their message into the start of many buyers' journeys, while YouTube occupies a less-clear position in the progression to a retail sale.

In this environment, the tech and media and entertainment categories could be bright spots for YouTube, as the MediaRadar report suggests. For example, Samsung boosted visibility for its mobile devices with a YouTube series targeting Gen Z consumers, with 78% of viewers saying they wanted to see more episodes of the "/make" series, according to our sister publication Mobile Marketer.