Teens love YouTube. But advertisers? Meh, not so much

YouTube appears to be winning the hearts and mind of teenagers — but not advertisers.

If you’ve never heard of Anthony Padilla and Ian Andrew Hecox, then you’re just not hip to the kids these days. Among teens aged 13 to 18, a study commissioned by Variety found the five most appealing celebrities were all YouTube stars, led by the aforementioned Padila and Hecox, known as the comedy duo Smosh. Mainstream Hollywood celebrities such as Jennifer Lawrence, Seth Rogen and Katy Perry were outpaced by the likes of The Fine Bros., PewDiePie, KSI and Ryan Higa.

Each of the top YouTube stars has a fanbase in the millions; Swedish video game vlogger PewDiePie, for example, has YouTube’s No. 1 channel, with 29 million subscribers. And according to the survey, the YouTube stars were seen as more authentic and relatable, characteristics that marketers see as key to influencing purchases through trusted endorsements. So they have the fanbase, they have the popularity . . . where are the advertisers?

To be clear, top YouTube channels have advertisers and plenty of its stars are profiting — but not as much as they probably should be. Google-owned YouTube launched a massive marketing campaign over the past four months that, according to a report by Ad Age, has succeeded in increasing viewers and subscribers but not in raising more ad dollars.

On the marketing front, YouTube’s campaign may have been preaching to the choir, solidifying commitments from companies who were already advertisers, but failing to lure more mainstream brands. While it appears advertisers are missing out on a largely untapped audience, some say YouTube is still too much of a niche market. “The programming (YouTube has advertised) wouldn’t quite appeal to them as some other folks where the base is broader,” Razorfish Chief Media Officer Vik Kathuria told Ad Age. “In terms of the programs mentioned, we couldn’t quite get any traction.”

Perhaps, as ReadWrite’s Stephanie Chan writes, YouTube is pushing its young stars on advertisers too hard when it would be better served bulking up its safer, more mainstream channels first. Still, “Advertisers are missing out on these lesser-promoted channels and passing on huge marketing opportunities,” Chan noted.

Though profitable, YouTube has been posting disappointing numbers of late. It reportedly earned just $1.5 billion in net revenue in 2013, falling short of a projected $2 billion, and viewership has not grown as fast as planned.  Ad Age says YouTube plans another marketing blitz this fall, and if they can’t count on the kids it will be interesting to see which channels they choose to promote, and if exposing a broader range of talent can do the trick in boosting revenues.

 

At top: Grumpy Cat and YouTube celebrity Rafi Fine of The Fine Bros. (Bret Hartman/AP Images for Friskies)

Mike Murphy Mike Murphy (363 Posts)

Mike Murphy is a web producer at the Mercury News, and also writes for Good Morning Silicon Valley and 60-Second Business Break.