YouTube will now run ads on channels outside of the Partner Program, and this spells like a win for Vimeo. YouTube’s change will expand ad their inventory by allowing ads to be served on any video on hosted the site (potentially, content guidelines will still exist). But the change will not expand the number of parties involved in the ad revenue share that YouTube gives to those in the partner program.
According to Mason Pelt who founded the ad agency Push ROI, “In the past YouTube did run ads on non-partner videos. This always, as far as I am aware, was exclusively a result of copyright claims, where the rights holder chose to run ads on the video and collect a portion of the revenue.” Pelt says, now that ads can be run on any videos, he will be much slower to suggest brands use YouTube embeds on their websites. “The benefits from social signals that embedding a YouTube video on a product page once offered are massively outweighed by the possibility of any ad disrupting the experience.”
Vimeo has long been a solution for brands to host videos, and recently raised $150 million to continue growth. As DCC’s own Jeffrey Cohen wrote covering that funding announcement,
“Vimeo, is often thought of as a competitor to YouTube, and while that is (somewhat) true, the business models are very different. YouTube is mostly a medium for advertising, while Vimeo’s revenue comes from a suite of software for video production, and distribution. Vimeo is used by over 200 million users globally including 3,500+ paying enterprise customers and another 1.5 million paying subscribers. Vimeo’s products allow businesses create, edit and host videos. The platform is also used for streaming live events, including like conferences and internal discussions.“
Pelt says his agency has used Vimeo in the past for clients, and says depending on the settings YouTube gives users to disable and control ads, that may be the only choice for brands to use an an embedded solution. “While large companies are often given kid glove treatment by YouTube, small companies may end with competitors ads running on their videos” Pelt said.
The business deselection seems wise for YouTube, as the company will now have ad inventory that doesn’t require a revenue share, and brands still want to advertise. But it also seems this is going to be a big win for Vimeo.