Reduced revenue for YouTube bloggers and CPA model
YouTube bloggers are sounding the alarm: right after the introduction of quarantine, advertising revenue in their videos has dropped sharply, although the number of active users of video hosting continues to grow. This is evidenced by statistics provided by managers of YouTube bloggers and bloggers themselves around the world. So, the Canadian manager of YouTube bloggers Carlos Pacheco admitted that from 180 channels, he works with, advertising rates have fallen by an average of 50% since the beginning of February, even though their audience totals 68 million subscribers.
According to data released by the New York Times, during YouTube’s self-isolation, traffic is growing and has increased by about 15% in just 1 month (February-March). However, despite the increase in audience, about 46% of advertisers cut the budget, and 25% completely stopped buying ads from bloggers.
In Ukraine, the situation is basically the same. According to the YouTube specialist, the founder of the SHATYRKO AGENCY, Andrei Shatyrko, if earlier (conditional figures for the CIS) advertisers paid about $200 per million views, then during quarantine advertising rates fell by 50%.
In a crisis, most bloggers have increased their working time. If some people released 1 video a week before the pandemic, now they release 2 each. Some adhere to the old schedule but increased the duration of the videos. It means that earnings should have increased by 2 times, but it is different. Many companies that previously used the bloggers’ advertising services, stopped funding, and, despite the intense activity, the earnings of many YouTube bloggers fell by 2 times.
But not all Ukrainian bloggers felt the consequences of coronavirus quarantine. The crisis did not affect those who previously worked on the CPA system (cost per action). The essence of the CPA model is that a blogger receives money for every purchase made through their affiliate link. Such a system allows them to choose the advertised goods independently, and not to depend on the advertiser.
An example of this is the statistics provided by the Admitad affiliate network.
In the first two weeks of April, their partner bloggers earned more on CPA than in the same period last year. If in April 2019 for one day they earned an average of $1199, then in 2020 – $1309.
“The blogger posts affiliate links on his channel. Subscribers follow them, make an order with the advertiser. After payment, the owner of the channel receives a percentage of the purchase sum. At these percentages, our webmasters earned an average of $1,310 per day. Each is different: someone has 10, someone – 100. Before quarantine, few bloggers worked on this model, because the fixed fee from direct advertisers is often higher. But we notice that the trend is changing. After all, you need to have an alternative if the advertiser refuses to pay or pauses the advertisement,” says Alexander Krivosheev, country manager of Ukraine at Admitad.
Among the most popular products purchased through affiliate links of bloggers in Ukraine are the following categories:
- Internet services
- Chinese products;
- online Games;
- goods from hypermarkets;
- mobile software;
- digital and home appliances;
- clothes and accessories, etc.
“We cooperate with affiliate programs. We earn from ad viewing. In our case, the earnings are small, but the money is not superfluous,” says Dmitry, author of Andro-news.com, a YouTube channel that works on CPA. Extra income is especially valuable now that advertisers are cutting budgets. ” There were fewer views and a 50% decrease in earnings. It’s all because our content is related to technology reviews, and people don’t think about new things at all now, added Dmitry.
At the same time, CPA channel revenue in March fell by only 3%. To somehow deal with the “quarantine” trend, the team began to create more content and hope for a surge in advertiser activity after quarantine ends.
According to the forecast of Andrei Shatyrko, the advertising market on YouTube will begin to recover closer to September. Indeed, in addition to the difficulties arising from the coronavirus, summer is usually a period when bloggers experience a drawdown in earnings. Therefore, you must use all the opportunities for monetizing channels.