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Food and beverage brands have enticed hungry consumers for decades with juicy chicken sandwiches and oven-fresh pizza in TV commercials at dinnertime. It’s classic contextual advertising—matching a product to the context in which the ad will be seen, without much user data in mind. Over the past year, an unlikely new mealtime behemoth has emerged, blurring the divisions between user-generated and major studio content, to tantalize hungry TV watchers more precisely than ever: YouTube.
Since 2022, YouTube has attended the annual IAB NewFronts event in New York, pitching and positioning itself to advertisers as a legitimate TV platform. YouTube is now a formidable competitor in the CTV space against big streamers like Netflix and HBO Max—in fact, at the 2023 upfronts, 48% of all advertisers reported allocating upfront ad spend to YouTube, second only to Hulu.
That other 52% of advertisers not taking advantage of YouTube are missing out on a huge source of value for their clients. Is too much of our industry still failing to take it seriously as a product discovery hub? The couch-watching context, the vast reach that only expands as linear TV’s reach dwindles, the wealth of user data, the low cost of entry—these all mean CPG brands should be aggressively allocating to YouTube in their CTV budgets.
CPG, meet CTV
Catalina Crunch, a healthy snack brand we work with, saw its best ROAS ever with YouTube CTV this year. It was a big discovery for us; we hadn’t expected CTV to be the best performer for crunch mix and cereals. We replicated a similar strategy with Dymatize protein powder, and the brand’s conversions per view are already well above standards and tracking toward another record response.
These kinds of results aren’t reserved for the biggest brands with the fattest budgets; YouTube is more affordable than premium advertising-based video on demand services like Peacock or Pluto TV, which often charge significantly higher CPMs.
Why YouTube CTV drives results
YouTube’s suitability for food, beverage and other CPG brands goes way beyond context. Its programmatic marketplace offers precise targeting based on given demographic, behavioral and contextual factors, real-time bidding and highly measurable results. YouTube’s interactive features like annotations, end screens and cards encourage user engagement and drive traffic to your brand’s website or other platforms.