Advertising on YouTube has changed significantly since YouTube’s original inception. The website didn’t have any forms of advertising on it’s initial release in 2005 but began to introduce “pre-roll” and “mid-roll” advertisements in mid-2007. In 2008 they introduced “Promoted Videos” and released their analytics tool and by 2009 they had already expanded ads to seven different formats. To get a full scope of the history of YouTube advertising, check out this infographic provided by The Atlantic.
But let’s fast forward to 2021, most people who watch videos on YouTube expect to see some sort of advertisement in the video, whether that be an unskippable ad before the video starts, an “integrated advertisement” (one where the creator actively promotes a specific product within the video), or even an advert that is displayed just underneath the video itself. All of these methods of advertising on YouTube have grown over the years with modern-day audiences understanding that everything comes at a “price.” With so much “freemium” content available online, people expect to see some form of advertising on services that don’t cost any money to use.
With all that being said, advertisements on one’s YouTube videos can be quite a lucrative way to make money, but advertising on your channel does come with it’s own sorts of challenges. Let’s dive into why creators might not want to feature an advertisement on a specific video/channel.
The first and most frequent reason content creators may not want to sponsor a specific brand is because the brand is not a good fit for the channel. No one knows a channel’s audience better than the creator themselves, so if the creator pushes back on sponsoring a particular brand, then there is a good chance their audience won’t like it either. This is an important note for brands that insist on sponsoring certain channels, because if the audience of one creator won’t be a good fit, a similar creator’s audience probably won’t be as well. For example, if a brand is really trying to sponsor Tech channels and multiple creators have turned them down, but one says yes, there is a high possibility they won’t see good conversions on that video. Some creators are looking for any sponsorships they can get and will not turn down anything, but if a large chunk of similar creators in a similar vertical are uninterested, you should take that as an indicator that this may not be the best route for your brand.
Not only that, but most creators want to sponsor products that ARE relevant to their audience, they know that if they don’t come off as genuine during integrations, their audience could lose trust in them or assume they will promote anything for some money -- this is problematic for both the creator and the brand. A smart creator will avoid these types of situations by only sponsoring products they genuinely believe in.
The next reason that content creators may turn down an integration is because they are trying to speak directly to their audience and don’t want any advertisements to take away from that. YouTube audiences understand the value that advertisements can bring to a channel and also understand that for their “favorite YouTuber'' to continue to make content, they will need to make money somehow. Therefore, when YouTubers have something serious they would like to address or speak about, they will often not monetize the video (including pre/mid-rolls) and make a note in the video how they are not monetizing this video. We’ve seen this with apology videos, important updates vids, or controversies.
A great example can be seen in this Casey Neistat interview with Logan Paul after Paul’s controversial Suicide Forest Video Casey explicitly states that he is not monetizing the video to underline the importance of the topic.
Some creators may even get into hot water if they do put advertisements on certain types of videos, because you come off less genuine when you are trying to make money off of your apology video. A recent example of this can be seen on a video from H3 Podcast Highlights, where the host Ethan talks about a falling out between his old podcast co-host Trisha Paytas, and how in her apology video to him, she included over 10 mid-rolls.
Sometimes a creator turning down an integration is not based on anything other than not trusting the brand or it’s product. There are so many content creators on the internet and if you are popular in a specific genre or vertical, chances are you are familiar with the other people who also are in that space. If a specific brand doesn’t pay creators on time, is rude to their publishers, or is unable to provide a product, other creators in the same space will hear about it. I have unfortunately heard too many stories about channels sponsoring a brand in a video and never getting paid for it.
Even without word of mouth, creators can easily spot brands that are unorganized, have sketchy products, or seem hard to deal with. Safiya Nygaard made a great video back in 2018 about this, where she explains how many of these “sketchy” brands have reached out to her in the past and she didn’t even entertain the idea of a sponsorship because they looked so untrustworthy.
Additionally, many creators have been burned in the past by brands, too high of expectations, incorrect or missing payments, or audience pushback if they feel the creator is “selling out.” Since many creators don’t have agencies to represent them or the bandwidth to deal with a violated contract litigation, they just refuse to do integrated sponsorships because they don’t want to be taken advantage of. Most creators understand that it’s not worth going to court over a $1,000 integration since the legal fees to sue them would far outweigh the payment they would have received.
Advertising on YouTube is a game about balance, the creator needs to get paid for the effort they are putting into creating the ad as well as their “worth” to the brand (this worth stems from channel size, average views, demographics, ect) vs. a brand’s need to see returns on their ad spend and get proper representation from the creator. This delicate balance can be overlooked by the brand and it’s a big reason why creators turn down sponsorships.
The value of a creator is different for every company and the amount that a brand is willing to pay usually boils down to two types of campaigns: brand awareness or direct response. For brand awareness plays, most brands work on a CPV model (cost-per-view) and try to purchase spots on videos with a high amount of views at a low CPV, this usually results in a higher dollar amount for a placement.
For the brands who are working on direct response campaign, they mostly work on a ROAS or CPA model (Return on Ad Spend / Cost Per Acquisition), since these two models involve having sales as a direct result of an ad, brands will have stricter budgets and may purchase channels at a lower dollar amount (since they’ll need less conversions to see a positive ROAS).
There is a lot of math and data to review on the brands end, so when brands negotiate rates for publishers there is a lot to consider. A popular method of “assurance” on the brand’s end is called a Views Guarantee. A views guarantee is when a brand pays the publisher for an integration and expects the video to hit a certain amount of views. This is great for the brand because they can hit their CPV targets and make sure they are not put on an underperforming video. For example, if a channel has a spread of different views on their videos with some hitting the 75k mark and others hitting the 25k mark, a brand could ask for a views guarantee of 50k and pay the creator the amount they feel would be fair for a 50k video. If the video “misses” the views guarantee, brands will either ask for a “make-good” video where they need to sponsor the brand again or won’t pay the creator in full for the integration. This is where overexpectations are problematic.
I’ve spoken with creators who refuse to do a view guarantee because they have been exploited by brands in the past. Knowing exactly how many views your video is going to get before it’s released is a complicated formula and creators can’t always guarantee that a certain video will hit the VG target. Additionally, many brands purposefully ask for views guarantees that they know the creator won’t be able to hit so they will be able to get another video for free (or find some way not to pay the creator).
These expectations can also cause trouble before and after the video is already live. If the brand doesn’t like how a creator spoke about the brand or if they didn’t hit some of the talking points, the brand has the right to ask for a make-good. The brand may also ask to see a draft of the ad so they can approve it before the video goes live. If the brand asks for multiple edits or just straight-up doesn’t like how the creator did the integration, it can cause a lot of extra work and stress for the creator. Additionally, if the brand is being too demanding about a draft or the performance of a video after it has already gone live, it very well may cause the publisher to not want to work with the brand again.
Since working at ThoughtLeaders the second most frequent issue I encounter with creators not wanting to sponsor a specific brand is that the rate is too low. As I just mentioned, figuring out the “value” of a specific creator involves lots of different aspects and moving pieces, but if a certain creator is getting paid about the same rate by a variety of brands, chances are if another brand offers them less that...they will say no. Although this seems like common sense, I have heard countless stories of brands trying to low-ball creators and it usually ends poorly for the creator.
Additionally, many creators make enough money on pre/mid roll advertisements that YouTube provides and don’t need the extra money from an integrated sponsorship. They feel that it would compromise the integrity of their videos by having an integrated sponsorship in each video and will only let a few of their videos be sponsored (or none of them).
In full transparency, most YouTubers don’t have the luxury of not sponsoring any of their videos because of YouTube’s strict monetization policies or that they just don’t have a large enough audience that it brings in enough money on midrolls alone.
Overall there are lots of ways to make money as a YouTuber, with integrated advertisements only being one option. Although including a 60-second commercial in the middle of your YouTube video doesn’t sound like a lot of work, it can be very straining on a creator; dealing with the brands, negotiating prices, waiting for product packages, recording the ad (and finding a good place to put it in your video), and sometimes haven’t to re-edit one’s video, is no simple feat. There is a clear trend of YouTubers beginning to have integrated ads in their videos and brands should be cognizant of the fact that not every single YouTuber wants to sponsor their product and it’s up to the brand to make the sponsorship process as seamless as possible for the creator.
YouTube advertising can sometimes be a gamble, there is no sure way to get consumers to buy your product and it’s up to the marketer to understand the brand’s target audience, the potential for customers, and the right influencer to represent your brand.