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How YouTube's new AI-powered product aids advertisers

The online video-sharing and social media platform is now using the AI technology as a way to help advertisers place ads on videos that better reach the intended audience.

YouTube's new AI-powered Spotlight Moments is geared toward advertisers and marketers looking to capitalize on significant events happening in consumers' lives.

The new package from the online video-sharing and social media platform, introduced on Oct. 16, uses AI technology to identify popular YouTube videos related to cultural moments -- such as major sporting events, holidays and entertainment industry awards shows -- and to serve ads across the videos referencing the events.

The new ad package comes as YouTube's parent company, Google, continues to extend AI capabilities across its generative AI chatbot, Bard, Google Cloud products and its AI Search Generative Experience.

Advertisers and YouTube's AI

The new YouTube system is reminiscent of ideas that many advertisers have had for years, Constellation Research analyst Liz Miller said.

Usually, when there's a big event such as the Super Bowl, some advertisers can't afford to advertise on TV, so they go on YouTube and try to place ads on the videos in which consumers mention football.

The difference now is the technology, Miller said.

While advertisers and marketers have always been able to capitalize on YouTube's extensive search engine with its videos and social media network, the vast amount of data on the YouTube platform also presented a challenge.

"The challenge behind all of that is that's a lot of data to try to suss through and figure out where, as an advertiser, you can get the biggest bang for your buck in investing in something like YouTube," Miller said.

Although YouTube has long provided various advertising products powered by AI or machine learning that enable advertisers to experiment with advertising through video feeds, ad rolls or banner advertising, advertisers still struggle with managing all the data the platform provides to create targeted ads.

The difference between YouTube's earlier and new AI products such as Spotlight Moments is that the AI technology works as a bridge between consumers, advertisers and creators. It helps advertisers make decisions faster about where to advertise, Miller said.

It's bridging all of those gaps of data and assets so that we can make decisions faster and be creative faster.
Liz MillerAnalyst, Constellation Research

As a human, it's hard to analyze all the data that YouTube presents to figure out which content might be best for an advertiser to place the ads on. However, the AI technology can present new content that marketers or advertisers have never thought of before that is a good fit for the intended audience, Miller added.

"It's bridging all of those gaps of data and assets so that we can make decisions faster and be creative faster," she said.

This use of the data that YouTube presents can benefit both large and small marketing and advertising companies.

For large agencies, it's about making decisions faster and creating campaigns with more impact, Miller said. For smaller agencies, it's like having an ad department within reach and working more efficiently with the limited funds they have.

"That's what a lot of these tools are allowing people to do," Miller said. It's allowing advertisers to take advantage of events that are important to their customers, she continued.

Moreover, features that enable advertisers to create different messages make Spotlight Moments a product that can unlock the ability of advertisers to deliver the right message at the right time to the right audience, Gartner analyst Nicole Greene said.

"The ability of AI to change how we consume data and assets, essentially helping advertisers to understand relevant conversations and deliver ad placements faster, is a practical application of the technology," she said.

A competitor

YouTube is one of several content creation platforms looking to appeal in new ways to advertisers.

On Oct. 16 CapCut, an editing app vendor owned by TikTok's parent company, ByteDance, introduced CapCut for Business, a suite of business tools that includes an AI-powered script generator that helps advertisers create ad scripts and AI-generated presenters. The AI presenters are avatars that communicate a company's message with demos and explainer videos.

Businesses can use the tools to craft videos to run as ads on TikTok, a YouTube competitor.

While TikTok and even CapCut appeal to consumers, the lack of transparency about the parent company could present a problem to businesses, Miller said.

ByteDance needs to clarify its relationship to the Chinese government, including how much financing it receives from the government, and other questions businesses might have about how the company collects and uses data.

Moreover, although YouTube might have had to play catch-up with social media formats such as short videos and reels, it still has the upper hand over TikTok.

"YouTube is a massive, massive mountain that is very, very hard to get around," Miller said.

Esther Ajao is a TechTarget Editorial news writer covering artificial intelligence software and systems.

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