- YouTube highlighted direct-response ads in its ads leaderboard.
- This move could be a sign of the format's strong growth amid the pandemic.
- Insider Intelligence analyzes this industry and several others to provide in-depth analyst reports, proprietary forecasts, customizable charts, and more. Learn more about what we offer.
YouTube has traditionally been a destination for brand advertising, as the platform's video ad options offer a similar digital alternative to TV ad campaigns. But lately, YouTube has been taking steps to highlight its performance ads, releasing a leaderboard of the highest-performing direct-response ads that use its TrueView for Action option. This option allows advertisers to add clickable elements to standard video ads.
While YouTube's direct-response business is still small, it's growing rapidly, and the pandemic has driven further growth as marketers shift away from brand advertising. Direct response is a fairly new component of YouTube's business—TrueView for Action was only released from beta in 2018.
But the format has been highly promising for YouTube: It reported that the number of advertisers using TrueView for Action grew by more than 260% in 2019. And this growth has continued during the pandemic, with CFO Ruth Porat reporting "substantial year-over-year (YoY) growth throughout the entire quarter" for direct-response advertising, while brand advertising "began to experience a headwind in mid-March."
Shrinking budgets due to the pandemic have pushed advertisers away from less-attributable brand advertising and more toward performance formats. Nearly two-thirds (65%) of US marketers and agency professionals agreed that advertisers will focus spending more on performance marketing amid the pandemic, according to March data from Advertiser Perceptions.
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