Google scuppers service comparing YouTube viewing with TV

Speaker 0 · 0:02

Hello. I'm Justin Levin, here together with my favorite global financial analyst and industry legend, Ian Whittaker, on our Unfiltered Media weekly podcast. Today, we're going to discuss the news that dropped yesterday about Google scuppering Barb's ability to measure YouTube channels. Now to provide some context, Barb was attempting to provide a level playing field of viewership, perhaps in response to Google calling YouTube TV. They were measuring the top 200 YouTube channels in a similar fashion to commercial television. Barb was extremely transparent about how it gathered the data. It wasn't perfect and there were nuances to the data itself. But it revealed some staggering stats which I'm sure Google didn't enjoy reading. We're able to see, for instance, how dominant content for very young children is on the platform together with content from streamers and broadcasters. Barb and Forbes, they're paying customers this month, but the FTPs yesterday made it all very public. Now I posted about this yesterday. Ian, I'm sure you saw this too. And the responses have been fairly wild and crazy in the sense that some are outraged and some have believed that the method Barb employed wasn't a true reflection of how YouTube is consumed. Ian, just on the outside of things, how does this all sit with you?

Speaker 1 · 1:28

Well, I mean, it's a very interesting tactic that YouTube has has done. I mean, from my standpoint, sort of, obviously, I sort of you can never get in inside the minds of a of YouTube management. But these are the sorts of tactics, sort of actions where if companies don't want information to disclose, this is exactly what they do. And then the next question becomes, of course, and this is a question I'd be asked asking as an analyst, why don't they want that information disclosed? In my history as a a stock analyst, it was always the case that companies promoted information that made them look good and tried to minimize the information that made them look bad. So I think for anyone out there listening, they they have to ask questions like that. I think the sort of behavior also as well does raise, I think, some wider questions here, both in terms of the issue around transparency. I'm a great believer in transparency. It is, as was said in the nineteenth century, the best disinfectant when it comes to, actually, how both companies and the politicians act and so on. I think this is a sort of scenario where what we need to see is we need to actually have some sort of information measuring sort of how YouTube looks against TV, even if it's imperfect. Because as you say, if YouTube is going around saying YouTube is TV, then people will be looking for some sort of idea as to how to actually relate the two. It's a bit like with currency. If you go abroad, you want to know what the exchange rate is. Otherwise, how do you know what to swap your pounds for or your dollars for? You wouldn't have a clue. The final sort of thing I'd say here, and this, I think, is a and again, I'm looking from a slightly different sort of angle than maybe many in the industry. You know, one one interesting parallel here is and it it it's a bit on a wider sort of historical context. One of the sort of most important things for revolutions to succeed is for the existing currency system to be effectively demolished. And you saw that, for example, in Russia in 1917. The communist were very explicit about that and so forth. And you could argue that what you're seeing here now is a similar sort of strategy that's been played. That a TV audience measurement system that has stood for several decades has always been accepted, that people have said this is something that we trust is now been undermined. And when the reply goes back that someone like YouTube should sort of be looking sort of be measured in TV terms, if it wants to be seen as TV, the the action is not, yes, we'll be more transparent or provide more information or lean into it. The reaction is, well, the existing system just doesn't work. It effectively is obsolete and needs to be changed. And I think that's probably the biggest underlying factor sort of that I think people have to consider. But I don't think this is just one thing in isolation, YouTube doing a a legal letter. I think probably what we're seeing here is sort of a much wider context, which is really the whole basis on which TV measurement has been been established, yet it's been undermined. What's your very unlikely to pick a history

Speaker 0 · 4:48

analogy for this particular situation, but that's that's on. That's good. That's good. You brought that in there. And I think a lot of people from the outcomes world are saying, look. This stuff doesn't matter because clients are trading on outcomes. And if Google are delivering them, does the transparency around the audience matter? Now I think it does because for me, this screams of the sort of big boy playbook to use legal mechanics if you like to stop something you don't like. Because who's gonna challenge them? We've seen this before in advertising with x and Elon Musk suing Garm. Gaum is a nonprofit who clearly couldn't challenge that legal suit, which had very little merit. Now it does show, as you pointed out, and I spoke to, a lot of advertisers and agencies in the last twelve hours anonymously. And a lot of them said that it does show that it looks like Google had something to hide. And perhaps doing this will have some unintended consequences for Google and YouTube. But here's here's my here's my main issue with this is that television is one of the last sort of big pillars of media spend for platforms to really go after, and YouTube are doing that. They are trying and achieving, if you like, in taking as much TV share as possible. And, an agency told me that they they want the TV money without the institutional rigor that comes with it. And here's my issue. It's very clear that they're happy with the big numbers around their viewership, but without the granularity. They want to show YouTube is huge on a TV set without showing exactly what is being watched and by whom. Is it music videos with stills? Is it fireplaces? Is it content for really young kids? Is it niche creators? Is it high quality drama? Is it content to keep dogs happy at home all day alone? There's lots of that on YouTube, as as you're well aware. And without that transparency, what it says is that all the content that is played on a TV set is TV like content and it just isn't. But here's the key, you can charge a premium for it all. So I think I think that's, for me, one of the one of the big issues with it. Going on some of the comments that we've had from buyers, one of the agencies said that they that YouTube really wanna have their cake and eat it. You know, they wanna take the TV money without any of the TV like measurement that comes with it. But clients, and I asked them this, are generally satisfied with Google's data. So it goes back to your point about the, about the jigs and the measurement institutions that we have in place. Is it really worth the TV companies paying for all that if clients aren't gonna pay attention? But this is a massive bone of contention for agencies because the agencies are telling me that they actually make more money from working with TV companies and broadcasters than they do with the platforms. Yet, they can't convince the clients to direct their spend back towards broadcasters because they are convinced that what YouTube offers them is what their businesses need. And I guess that's the problem that we have at the moment is that direct relationship and that trust from a very high level that Google have with these companies, and that filters down to their to their media their media teams and their marketing teams.

Speaker 1 · 8:10

Yeah. It's an interesting one. I mean, I think what's underlying all of this and it it's if anything, it's more you know, you could argue that this in a way is is more psychology than anything else. It's the big underlying assumption that's often not said, but which I think drives a lot of these conversations, and you say particularly amongst clients, is that the tech platforms are essentially scientific and therefore that they're neutral. That actually because they're sort of based on on what engineers have come up with, that it's a very sort of scientific formula that they've gone through, and therefore, it's not subject to the bias or indeed the problems that you would get with, let's say, traditional media platforms. You can see this in a way with with attribution models. Yeah. When there was a famous case in a number of years back of Adidas realizing that actually paid search didn't work for it in Latin America, Turns out their attribution models, they were using models from Google, Facebook, and Adobe. Google and Facebook had a direct direct sort of interest in how advertising money was being directed, and yet the assumption was that those attribution models would give a neutral result. Now from the outside as a financial analyst, I'd say that's absolutely crazy. If that was in my in the financial industry, you'd have red flags that'd be flashing up left, right, and center. It'd be a clear conflict of interest. That doesn't seem to be the case in the advertising industry, and I think this is what's going on here. When those clients say they're happy because so that YouTube gives them the the outcomes that they want. Obviously, they will have their information and and so forth, but it'd be worthwhile sort of questioning and probing a bit more to see what exactly is the data they get. Where does it come from? How they checked it? So that how they can be sure that it's actually independent. Because at the end of the day, and it comes back to what you said about TV advertising money, you know, YouTube wants money. And if it wants TV advertising money, it has a vested interest in portraying itself in the best light in order to get that money. And that will drive its behavior. It's a simple it's a simple as that. I've written on this before. Cube's advertising revenue growth has been slowing down over the past couple of years very significantly. It looks like it's significant below TikTok in terms of growth rate. And TikTok in the next twelve to eighteen months is gonna power past it. It needs TV advertising money in order to reaccelerate its growth rate. It's as simple as that and boost the valuation. And if you have that situation, then I think people really need to be asking more questions to say, is the data and the information we're getting back truly sort of of neutral, or are there any vested interests that are at play here? Well, I I I know that one of the problems that you've got with YouTube from from a client's perspective I work for a measurement company and and one of the number one questions

Speaker 0 · 11:17

that that business gets is can you share any YouTube insights? And what they're looking for is independent intelligence. When you look at television, it's one of the most analyzed and researched and sort of reviewed media out there. It's actually pretty expensive actually to deploy as a result. But what clients are looking for is something to support what they're doing beyond what Google says. So things like understanding share of voice, what competitors are doing, where are they advertising, when, around what content. TV has all that information available to it to clients. And clients use that to plan and execute and all that sort of stuff to see what their competitors are doing and how to respond. But what YouTube wants to do, they wanna keep that information in house and feed that to clients themselves directly because they want to control what messages they're sending to the market and to advertisers to ensure that they build FOMO, drive more sales, and all that sort of stuff. But this inter independent, intelligence that is available on nearly every other media out there is just not available on YouTube. So that's what clients ask. But one of the things that strikes me of this is that, obviously, they're claiming to be TV to get TV dollars. What do you think that says about YouTube's claim now when they're sort of not joining these independent institutional bodies that measure TV?

Speaker 1 · 12:43

Look. There's a wide range of opinions on here in terms of of, you know, YouTube is TV. Sort of we've debated this in the past. I mean, my view is it isn't, but there there are plenty of people out there who hold the view that it is. Ultimately, what this boils down to is a question of process. Yeah. The real fight is really within the agencies because that's where advertising money is sort of is divided up into silos and and still very much the ad agencies, the media buying sort of parts are still very much divided up sort of in a traditional way. I think that so my view is that it will probably won't help. The question is whether in a minor way or a major way. I think as you said before, it certainly will raise questions as to why YouTube doesn't want this information out there. Yeah. Again, you you know, the question that I sort of would would pose to people is if, for example, the barbed data had come back and show that YouTube channels were actually the top channels in the country and everything else had been done the same, would this legal lawsuit be happening? That was a yeah. That's a question for people to ask themselves. But, you know, I think, you know, it will raise questions as to, what's the motivation behind this. Again, it it's a similar, you know, I raised this more from a a a sort of more general standpoint. A lot of the tactics that you're seeing here, funny enough, you see it in the geopolitical sphere in terms of China, in terms of their work. But in terms of the way that sort of there is a a desire as it were to control the narrative around, you know, regular regulatory, but particularly sort of standard certain bodies and how standards define. Because once you define a standard, then that gives you a path to control

Speaker 0 · 14:40

of a particular industry. It's not just China though as well. Like, the The US are And The US. Working this way at the moment. There's some news stories about what's going on in Minneapolis, and some of the, some angles of or versions of the events have been displayed differently on Meta and other social platforms that look like now are under more of the control of the US government. We're going a little bit off topic with this, and it is part of the play, but they I think Google have done an incredible job at always managing the PR and the optics around everything that they do, and they seem to get away with it. And I think the overriding message that I've had from speaking to buyers the last twelve hours is that, yes, we care. Yes, it looks fishy. But, you know, someone messaged me who's who's a consultant for a lot lot of clients, and they just said they simply don't care, that this will have minimal impact on spend. And that's that's saddening to hear, but they but they just don't care. And that that to me is an issue. However, I believe when you look at the the measurement of the TV industry, there's a response to be to be had here, I believe, globally. There's jigs and mocks who have seen this method and they've seen the noise it creates. And I think that there's a there's an opportunity here for all these companies to actually do a similar thing to what Barb did. And who's to say that Barb's not gonna find a workaround, by the way? They might come back with a different method. Who knows? But I would like to see all jigs and mocks do the same thing because Google can't go around and use their legal strong-arm or suing them all in order to not have them do it because that would just look absolutely ridiculous. So maybe the opportunity here is for all of these measurement and trade bodies to do exactly the same thing and to see what the response is.

Speaker 1 · 16:26

Yeah. I mean, look. There there probably should be some coordinated response. I mean, I was just thinking before about what you said about clients who care about the outcomes. Again, one thing would be interesting is if clients are thinking that YouTube works for them, the question would be what type of content works for them on YouTube. Yeah. Is it broadcaster's content? In which case, actually, it's traditional TV style content that is driving the results. I mean, the simple fact is that we just we just don't know with this. I think it is true that there probably does need to be some sort of coordination response on here. I think the issue that you have at the moment I mean, if you just look at it from a pure power dynamic standpoint, YouTube has probably got around, in terms of advertising revenues, 25% of global TV ad revenues. So it's obviously a lot smaller, but, obviously, it's one entity, whereas there's not actually a single sort of unifying voice amongst the TV industry. And I think in principle, what you say is absolutely absolutely right. My concern would be actually in practice, whether it comes into fruition because, yeah, unfortunately, I suspect unless there's a very strong hand that actually a very strong neutral hand that can keep everyone in line, what will happen is, yeah, the the sort of agenda will get derailed by internal politics. People will have yeah. Different players will have different agendas, and that will mean is not a unified response. So so I I think something needs to be I think something needs to be done. And what your client said about sort of will it change, will it change spend, You know, on reflection, I I I'd probably say there's more chance of that than suddenly everyone will go, we can't spend on on YouTube. Look, YouTube is you know, I know sort of so far, we've been generally sort of, maybe maybe negative about sort of what they've done. But the flip side of it is a great platform. The as a global plat it is, you know, it's absolutely fantastic. And in terms of the content that you get from there, it is great, and it certainly has its place within the ecosystem. But I do think things like this, when you look from what's happening here, the the sort of the starting cause of this is really all about TV advertising money. And I think, you know, for YouTube, they're very focused on getting that TV advertising money. They want more share of it. They need it and so on. And so anything that potentially hinders that path, whatever way they can, they will seek to to minimize that threat. And that's what most businesses do.

Speaker 0 · 19:05

They do it in different ways, but it but it's what businesses do. I've I've said it for years that it is an incredible platform, and I just think it could be, a lot more cohesive with the wider industry and work within the rigors of these bodies rather than against it. And what drives me particularly crazy working with jigs and mocks around the world is how they work so hard to try and cozy up with Google and YouTube. And then they're never going to work with them in the same way that TV companies work with these institutions. And they should probably realize that and plan around it and have some sort of coordinated effort to to challenge that narrative. They've got to protect their base. We've seen it with data about how much inventory now is being traded within these transparent and independent bodies, and it's going down. Now they have to fight, and I think that they should fight in a coordinated way. Well, it's been a really interesting, last twenty four hours with this news dropping. Appreciate your analysis. I'm sure there's gonna be a lot more of this online. And until next time, thank you very much for listening, everybody. And as usual, this is not investment advice. Exactly.

Speaker 1 · 20:20

Bye, everyone.

Speaker 0 · 20:21

Bye bye.