The world’s largest online video platform has announced that in 2023, new ad formats will be available between videos on YouTube Shorts for YouTube marketing. To compensate advertisers for the ad revenue they generate, YouTube is adjusting its partner program, making it easier to monetize short-form channels. What challenges and opportunities does the new ad format bring, and how can these YouTube ads be aligned with other revenue streams on YouTube? Our online marketing Munich team has researched this for you.

What are YouTube Shorts?

The developments in search behavior on Google are constantly evolving, along with the requirements for effective online marketing. Google responds to this by enabling the creation of short videos with YouTube Shorts, allowing them to be edited and shared with the community.

All you need is a smartphone and the Shorts camera in the YouTube app. Using the various Shorts creation tools, you can create clips with a maximum length of 60 seconds in no time at all.

In a nutshell, YouTube Shorts are like YouTube videos, only shorter. According to YouTube, Shorts now average over 30 billion views per day. This is an important sign that the popularity of short videos and the increased focus on them is striking a chord with the zeitgeist.

How do ads work in Shorts?

Until now, monetization for YouTube marketing in Shorts was only possible through the YouTube Shorts Fund. This is a $100 million fund that will be distributed over the 2021–2022 period, giving Shorts creators the option to apply for a payment from the fund for their Shorts.

This means that creators of YouTube Shorts can earn between $100 and $10,000 depending on the number of viewers and engagement for their short films. The Shorts Fund was seen as the first step toward monetization for Shorts.

With growing viewer numbers, YouTube Shorts are accounting for an increasing share of YouTube usage. YouTube is responding to this development by introducing a new ad format in Shorts to generate new monetization options for advertisers.

Also new: Previously, YouTubers needed 1,000 subscribers and 4,000 hours of YouTube watch time in a single year to qualify for YouTube's long-standing monetization service.

The 1,000 subscriber requirement still applies, but YouTube wants to ensure that YouTubers can run ads even if their videos are only a few seconds long. YouTube is waiving the watch time requirement for YouTubers who achieve at least 10 million views of short-form videos over a 90-day period.

What is the potential for advertising in YouTube Shorts?

YouTube's traditional partner program offers advertisers 55% of the advertising revenue they generate, while the other 45% goes to the platform. With YouTube Ads costs for Shorts, the split is reversed.

YouTube Ads are still worthwhile for advertisers, however, because shorts are easy to create, offer the potential of an additional advertising channel, and serve as an interesting lure for companies' main YouTube feeds.

Outlook: Online marketing on YouTube in 2023

Neal Mohan, Chief Product Officer at YouTube, summarized the development at the live streaming event “Made On YouTube” as follows: “YouTube's industry-leading partner program has changed the game for long-form video. Now we're changing the game again, this time by opening it up to short-form creators and introducing revenue sharing for Shorts.”

YouTube is thus offering the first opportunity for revenue sharing for short videos on a large scale, opening up another avenue for monetizing video content.

In this context, you will certainly be interested in how you can use YouTube Ads for Shorts profitably in your company and what options are available.

Our full-service agency supports you from developing a suitable strategy to the practical implementation of the new ad formats in Shorts. Schedule a personal meeting with our online marketing Munich specialists. We look forward to meeting you.