Inspired with the success of social media platforms like TikTok and Instagram, YouTube decided to test short-form videos in 2020. Was it late to the party? Probably. But was it right in introducing the feature anyway? Let’s find out.

Testing Phase

Similar to Instagram reels, YouTube introduced Shorts in 2020. This feature allowed users to upload 60-second videos to their accounts. So, it encouraged the creation of creative content that could fit into a tiny time frame.

After giving it about a year to gain popularity, YouTube decided to monetize the feature. The video-sharing giant began to test ads on Shorts. These ads generally limited themselves to app installations and the like.

The company realized most people using the feature would likely be quite tech-savvy and willing to try out new apps. However, it was fairly careful about its ad-targeting efforts and analyzing the results its featured ads on Shorts.

YouTube gathered feedback from its advertisers early on and analyzed the results. Early results seemed to be encouraging, so the social media giant decided to take things further and continue to float such ads on the platform.

Last year, YouTube gained 400% more viewers for its Shorts feature than it did in 2021. With such promising results, it’s hardly surprising that the platform decided to promote the use of the feature.

Two factors proved to be a rewarding gamble in terms of Shorts’ revenue:

• An increase in viewership
• Monetization

 After testing ads, YouTube brought in over $6 billion in the first quarter itself.

This figure was lower than what experts had initially anticipated. However, it’s safe to say that with the dramatic increase in viewership, expectations might have been a tad optimistic.

After all, with the astounding success of Instagram reels, who can blame YouTube? Initially, YouTube offered content creators thousands of dollars every month to rake in viewers for Shorts.

It was an attempt to engage viewers by tempting quality content creators away from TikTok and Instagram. The plan was to use such creators to build up an audience, while YouTube developed a proper strategy to monetize its Shorts feature.

Currently, YouTube’s budget allocates $100 million to pay for creators on the platform who create quality content in the form of Shorts. These creators are those that possess the skills and audience to create viral content.

The monetization didn’t include just display ads the likes of which YouTube featured in its full-length ads. Instead, it also allowed content creators to add branded content to their Shorts.

There were also plans to introduce a chat service for interested consumers alongside an option to purchase products directly from a short.

Success and Execution

If YouTube wanted an increase in viewers over the last 2 years, it may have achieved more than it bargained for. Earlier this year, YouTube Shorts hit a whopping 30 billion views per day.

Thanks to the large cash bonuses YouTube has offered users since 2020, it now has popular influencers and content creators to feature alongside its regular content. The work of these creators has brought in over 1 billion monthly users who watch Shorts.

With such a high number of users, it’s not surprising that there’s now an increase in competition (and fees) for floating ads on the platform. Users on the platform now see recommendations for Shorts like they do for regular, full-length videos.

This may have helped propel users to watch Shorts on the platform rather than other videos. Is this eating into the viewership for regular videos on YouTube? That does seem to be the case.

After all, longer videos feature more ads of longer durations. Few users would prefer to sit through long ads rather than the shorter ones they can view on Shorts. With the increased investment in Shorts, however, it’s easy to see that YouTube is expecting a corresponding increase in returns.

YouTube doesn’t plan on using a fund to lure content creators in the long run. Eventually, the company anticipates it’ll generate enough revenue from ads for content creators to make money from.

Floating branded content in Shorts could be the key to attracting good creators to prefer the platform over other video-sharing giants like TikTok. However, it’s essential that they perform a proper execution.

Luring creators away from the large audiences they enjoy on Instagram and TikTok is no cakewalk. A few weeks ago, YouTube started featuring ads on Shorts, but it’s yet to share ad revenue with its content creators like other platforms do.

Considering running ads on Shorts is still in a testing phase for YouTube. It may take some time before it shares its regular revenue-sharing program with content creators. However, with the recent success of Shorts in terms of viewership, it’s only a matter of time before they take the next step.

Conclusion

Shorts may have proven to be a great success for YouTube in terms of viewership since it introduced this feature. However, how much revenue it manages to generate from ads on Shorts remains to be seen.

An advantage that platforms like Instagram have over YouTube in this regard is that they encourage a greater degree of direct engagement. Connecting with viewers (and potential customers) with a direct messaging feature is something that YouTube may benefit from.

For now, its prospects look pretty bright with the newfound popularity of the Shorts feature.