Key Article Takeaways:
- YouTube, while usually more expensive to create content, is the best for SEO, driving meaningfully low CPC’s, production quality, and direct sales.
- Every YouTuber has two subscriber bases: the one that follows them directly & then everyone who searches on Google (aka – everyone else)
- YouTube and video placements in general are better at demonstration and relaying more information
- Instagram has the lowest CTR of the platforms
- TikTok influencers are hustlers. They are on average more cost efficient, more flexible and more friendly than any other platform
- TikTok is currently the place where you have the best chance for content to go insanely viral
gen.video has always had a bias toward video which as of a few years ago meant that our top three platforms were YouTube, YouTube and YouTube. We were aware of the dominance of Instagram as the top platform for sponsored content, but just didn’t see comparable opportunities based on our focus on downfunnel traffic and sourcing video content that our clients could repurpose.
Today, it’s a spoil of riches with YouTube, TikTok and Instagram itself becoming much more video oriented. Here’s a good rule for anyone early in a career in media:
Never bet against video.
As we look to the future, the only question we have is whether livestreaming will ever take off here the way it has in Asia.
To get started, let’s size these platforms up a bit. Although there aren’t any publicly available estimates of sponsored influencer marketing spend by platform, we can use some other numbers to get a sense of scale. Influencer Marketing Hub estimates the total influencer marketing industry at $16bil worldwide, so it’s only a fraction of the $75bil or so in global ad sales that these platforms alone are generating (which may explain why they aren’t more aggressive about collecting tariffs on sponsorships).
Chart Sources: 1 eMarketer 2 Statista 3 Business of Apps 4 Statista
What I find interesting about these statistics is that while Instagram is clearly a monetization machine: its US-based revenues are equal to YouTube’s global revenues despite having a smaller user base. Likewise, Instagram’s US revenue is more than 50% of Facebook’s US revenue, again, despite a smaller user base and lower time on site.
TikTok’s $4.6 bil may seem small by comparison, but while the others are growing no more than 40% (which is very fast by any normal standard), TikTok is projected to grow by 3x in 2022 to $11 bil (souce: Reuters, citing Insider Intelligence). Is TikTok a flash in the pan? Not likely. Scott Galloway has just reported that TikTok’s monthly time spent per user exceeds Facebook and Instagram combined:
Transparently, while we support them technically, we’ve never seen much opportunity on Snapchat or Pinterest. And while we like Twitch, they typically present more niche opportunities. Twitter, for us, has always been about supporting primary posts. We’re also pretty fascinated by LinkedIn given more and more B2B orientation in our clients but not enough experience to speak from a place of expertise. If anyone has great experience on these platforms, feel free to do self-promotion in the comments.
All right, with the sizing done, let’s dive into the platforms and talk more about them from a bit more of a “microeconomic” perspective.
Commonly recognized as the largest platform for sponsored content, historically Instagram was image-based. Today, not just Stories and Reels, but even video within feed Posts has made it a home for both image and video content. That alone makes it a reasonably unique platform as YouTube and TikTok are video only.
As popular as Instagram is, we believe it was historically cheaper than YouTube at least on a reach basis. This made sense on a few levels:
- It’s more time consuming and complex to produce video than images
- The average engagement with a video is going to be longer than most image engagements, even if the viewer interacts with the content (e.g. - reads the caption and likes)
There are some verticals that are ideal for Instagram, primarily fashion. The ability to show clothing in a still image or short vertical video is arguably all you need to close a sale (which isn’t to say there isn’t great fashion stuff happening on TikTok). Cost efficiency matched with ‘conversion sufficiency’ is a potent blend made even more impactful by the prevalence of direct to consumer (DTC) brands in the fashion vertical where measurement is more direct and straightforward than with a multichannel brand.
In other verticals where more demonstration and information is required to really inspire purchase, Instagram has some deficiencies even where video is in full use:
- SEO, or lack thereof: Instagram is truly focused on browsing. Although content remains indefinitely in the feed with Posts and Reels, there is not really a lot of search-based consumption of older content. Stories of course disappear after 24 hours making this content truly brief.
- Links: The lack of links in feed posts presumably cuts back on clickthroughs and Instagram has the lowest CTR of the three focus platforms which is a meaningful value detractor.
While currently the most expensive platform from the perspective of reach and usually views (or impressions), YouTube can be cheaper from the perspective of Cost per Click (CPC) and we see it as almost always superior on some other important factors:
- Content / production quality: The ability of (many, certainly not all) YouTube influencers to create content that is professional grade in terms of production quality and therefore repurposable for alternative use cases is second to none. In his seminal book Zero to One, Peter Thiel famously said that to be a truly disruptive technology, a start-up had to have a solution that wasn’t 50% better than existing incumbents, not 2x better but 10x better. That is what YouTube is: video content that easily would have cost $100,000 to make 10 years ago now costs less than $10,000 when produced by a capable influencer. This is one of a few reasons why more and more of our clients - thrilled with the performance of our influencer campaigns - are coming to us more and more for ‘production only’ work.
Obviously, if you are looking for repurposable images or vertical video, you aren’t going to be able to take a YouTube video and directly repurpose it. That said, while you typically aren’t getting great long form video from an Instagram-first influencer, we’ve been able to source great lifestyle images and even vertical video from YouTube influencers.
- SEO and actual product research: This is the secret weapon of YouTube that can’t be over-estimated in value and impact. To state the incredibly obvious, YouTube is part of, and indexed within, the biggest search engine in the world. People are searching for advice on everything, not least of which are product recommendations. We have run an untold number of campaigns where the views, clicks and sales during the initial campaign “flight” (3 months), will increase by 4x or more over the next 9 months. So in the mind of the brand, just as the campaign is ending, in reality, it’s actually just getting started and even picking up momentum.
Nothing makes me happier than sending a “You aren’t going to believe what happened on campaign XYZ over the last 6 months” but it happens so much we should really stop acting surprised. What is happening here? What’s happening is that we are moving from subscriber viewers to product researchers. And from the perspective of the search algorithm, this is organic, evergreen content. It’s like every YouTuber has two subscriber bases: the one that follows them directly & then everyone who searches on Google (aka – everyone else). Maybe that’s an exaggeration but it’s hard to think of a better audience than the one searching terms relevant to your product!
- Best outbound linking opportunities: IMHO, the YouTube description box is one of the most interesting pieces of real estate on the entire internet. Whereas TikTok and Instagram don’t allow any off-platform links in their primary caption fields, the YouTube description is a free for all, with unlimited links on and off platform. It’s a bit like the old saying, “I’ll give you enough rope to hang yourself” as every YouTuber knows that the key to getting more love from the algorithm is to keep viewers watching more content, so that space is often used to promote additional content on YouTube. But you can imagine YouTube also loves the contextual information available in the off-platform links.
No matter what is going on, we *love* the ability to either link off to multiple retailers directly giving shoppers a choice on where to go or linking out to multiple products individually. Does it work? Absolutely. Click through rates are uniformly higher when shoppers have choices on where to go. And don’t worry about YouTube, that flexibility makes their platform more valuable for sponsorships.
- Most direct sales: All of this leads to the most directly attributed sales of any platform. That doesn’t mean that every product is going to see material sales from a campaign. Some products just still don’t lend themselves to purchase / switching in the span of a single video. But enough others do that we are highly confident of the impact that is being made.
All of this is what made YouTube our favorite platform even before most marketers got there. So it’s especially gratifying to see this quote in HypeAuditor’s 2022 US State of Influencer Marketing Report:
56% of marketers say that YouTube videos are the most important type of content format for IM.
What’s not to like? The primary detraction on YouTube currently is the variability of the algorithm which can result in some videos getting multiplicatively lower views than others. YouTube has long been known for punishing influencers who strayed outside their area of expertise, it now seems like they might be punishing influencers who have too many sponsorships. Or, they are losing viewers to TikTok and randomly spreading the pain from that dip around the pool as we are seeing not only a flattening of views in many cases but some videos simply flatline right out of the gate and never gain traction. That’s a tough thing to explain to a sponsor.
TikTok is the new kid on the block and is capturing not only a lot of viewer activity, but also the brand attention that always follows user adoption. That said, there’s maybe just the slightest hint of hesitation on some brands’ part. Is it that they aren’t sure the content is quite right? Data privacy concerns? Unclear, but the net result is that there’s a bit of a “we try harder” attitude both from TikTokers working with brands and from TikTok itself.
I have to admit, I was skeptical at first myself: nurses twerking to Beyonce didn’t seem like it had much chance of becoming a serious competitor to YouTube. That said, TikTok has evolved very quickly and everyone is familiar with stories of products that sold out online and offline after trending on TikTok (#TikTokmademebuyit).
And that is a great place to start. TikTok says that its algorithm works on an interest graph vs. a social graph. So sure, you can follow people but the videos that the “FYP” (for you page) serves up are based on your interests over the people you follow. So if you start watching videos about a specific product, there’s a strong likelihood that it is going to seem like everyone has made videos about that product. The Wall Street Journal and others have called it the ‘TikTok rabbit hole’ and even highlighted the negative behavioral consequences for teens and others (the WSJ and others have also taken Instagram to task for its addictive algorithm. All great topics but beyond the scope of what we’re about).
In many ways, TikTok is really somewhere between YouTube and Instagram:
- Vertical orientation and limited linkouts like Instagram
- Video focus and slightly more SEO potential than Instagram
And even beyond this “best of all worlds” there are currently some very human TikTok advantages that we like:
- TikTok influencers are hustlers. They are on average more cost efficient, more flexible and more friendly than any other platform. Probably just a moment in time but it’s great for clients and is enabling us to find the value points everyone believes exists in the platform (but isn’t quite proven yet)
- TikTok has great partner support. Facebook got exploited by bad partners like Cambridge Analytica and YouTube was forced to cut ties with the initial batch of (bad acting) multichannel networks. On the other hand, TikTok has staffed up as fast as they can and works really hard to support anyone in the ecosystem.
In terms of performance:
- Virality and Views: The upshot of the content algorithm, snack-size video and focus on a single format (what Instagram really needs is ANOTHER format to post content in) is that TikTok is currently the place where you have the best chance for content to go insanely viral. An influencer recently did a value-add cross post on TikTok recently and by the time she mentioned it to us, it had 4.5 mil views. That’s a good day in any campaign. BTW, our first viral video on TikTok was about toilet paper, so as always, you’re likely to do more harm than good by gaming the algorithm
- Traffic: Downfunnel traffic has gone from unavailable to hit or miss. My readout is that people are engaging and interested in going deeper vs. being purely in entertainment mode and that’s enough for now. The potential for real product research is there.
- Sales: That last paragraph might make it sound like I haven’t been reading about all of the #tiktokmademebuyit stories where product shelves have been stripped based on a TikTok trend. I have read the stories and believe them. They illustrate that people are open to ideas that they discover on TikTok. It does not, however, indicate that people consider TikTok a place to proactively search for product information.
It’s awesome to be able to match a client’s priorities and KPIs by leveraging different platforms, let alone across the thousands of influencers across those platforms. And that’s where we will turn next week: to the differences between small influencers (nanos and micros) and larger influencers (macros).