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Why There is More Traffic to YouTube But Less Revenue for Vlogs

[PHOTO/ COURTESY]

Traffic to YouTube has increased significantly since the Coronavirus outbreak as most people adapt to working from home. The Safaricom fibre internet demand just went up by 70 percent as more people are looking to get connected and carry on their lives online.

The internet has become the new normal. You would expect that with more shoppers ordering their household items online, there would be a surge in online revenue. However, many YouTubers are making less money owing to the pandemic.

Although many users are flocking the site for entertainment and work related ventures, advertisers have either reduced the rate at which they advertise or have paused their adverts. Many companies have closed or suspended operations and essential services are being offered within set time limits.

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Food, household items and sanitizers seem to be on everyone’s shopping list. However, purchase of clothes, shoes, electronics, home accessories and even beauty products are at an all-time low.

Data from the Interactive Advertising Bureau shows that one in four media buyers and brands have paused their advertising in the first half of 2020, while 46% have adjusted their expenditure downwards. Analysts have observed that the Coronavirus might be worse for the advertising industry than the 2008/2009 financial crisis.

We are likely to see less advertising from corporate giants and reduced ads on YouTube. One YouTube adviser, Carlos Pacheco, pointed out that across 180 channels that he works with and have 68 million subscribers across various demographics, advertising rates have reduced by about 50% since February.

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Digital ad spending has gone down by a third and YouTubers are currently reporting a 30%-50% decline in their cost per mille (CPM), the amount YouTube receives for every 1000 views of an ad. YouTube gets 45% while YouTubers get the remaining 55%. Although the audience for many vloggers has gone up, advertisers are bidding lower and this means that they are getting more audiences for much lower rates.

However, most YouTubers are using this chance to amass the audience and doing very little on production to cut costs. They are hoping that the pandemic’s impact will last about 3 to 4 months before things bounce back.

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Written by Vanessa Murrey

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