Programatic Research

Part
01
of two
Part
01

Monetization Failure, Pt. 1

Many of the platforms that fall under the "walled gardens" category (e.g., YouTube, Facebook, Instagram) have chosen to implement very strict content monetization policies and partner monetization policies.

Helpful Findings

  • One of the difficulties surrounding monetization for independent content creators/publishers is that most platforms have rather strict policies regarding monetization eligibility.
  • As of the year 2018, creators, such as independent content publishers, are required to maintain at least 1,000 subscribers and have their uploaded content generate a combined total of about 4,000 hours worth of viewing in order to become eligible to monetize their videos on YouTube.
  • On YouTube, most popular creators earn their money by their viewers watching advertisements (before, during, and after the uploaded video), but advertisers ultimately determine how much they get paid. It is estimated that independent content publishers/creators on YouTube may earn between $0.35 to $5 for every 1,000 views on their video content.
  • According to Facebook, publishers are required to abide its Content Monetization Policies and Partner Monetization Policies in order to acquire and maintain monetization privileges. Nonetheless, Facebook states that content that is considered appropriate for the platform in general is not always suitable for monetization. Also, there are many prohibited formats that could prevent creators and publishers from attaining monetization approval, including looping videos, slideshows of images, static image polls, static videos, embedded advertisements, and text montages.
  • Moreover, there are certain content categories/subjects that could lead to restricted or reduced monetization on Facebook, such as tragedy or conflict, debated social issues (if presented in a polarizing manner), politics and government (e.g., political candidates, appointed or elected government officials, political parties, registered political committees, and communications regulated as political advertising), etc.
  • Instagram has almost identical content monetization policies when compared to Facebook, making it difficult for independent publishers/creators to acquire and maintain monetization privileges on either platform.
  • A 2019 report revealed that advertisers on YouTube are getting anxious about independent content publishers/creators. Instead, they are purchasing from premium-quality content owners that carry lower risk, presumably making it more difficult to maintain monetization for independent content publishers/creators. Agencies are choosing to redirect their spending towards "channels with content created by premium media owners."
  • Some platforms that are a part of the "walled gardens" segment, most notably YouTube, are moving away from independent content creators, instead focusing on much larger advertisers. Demonetization has also led to independent content creators being denied paid advertisements in some spaces, creating incredibly difficult environments for creators and publishers to thrive considering advertising serves as one of the most generous source of incomes (28% of content creators listed it as the method that provides them with the highest compensation).
  • Additionally, independent content publishers/creators face an uphill battle when it comes to reaching a position where they are paid generously for subsistence, as audiences often do not pay them directly (Patreon and similar platforms have a low success rate) and they are not paid for subscriptions. Their top revenue sources are advertisements, brand deals, affiliate marketing, and exclusive content.
  • Also, an independent content publisher/creator's monetization is impacted by non-compliance, such as a failure to identify whether or not their content as suitable for children, and the policies surrounding this subject can at times be confusing.

Research Strategy:

After an exhaustive search through credible sources, we were unable to determine how many independent content publishers had to shut down because they could not monetize their content. No research, surveys, reports, etc. have covered this particular topic or they have yet to release their findings to the public domain.

For this request, we first searched for recent surveys and studies by reputable research organizations and firms, hoping they would offer insights into the number of independent content publishers that have chosen to shut down their channels due to an inability to monetize their content. We explored through sources such as the Pew Research Center, Nielsen, and Gartner, among others. However, none of the surveys and studies we encountered provided any relevant findings as it relates to the number of independent content publishers shutting down because they could not monetize their content. Most of them just covered general topics regarding content creators on various platforms.

Next, we explored for reports and articles published by news and media sources, along with trustworthy blogs, covering either independent content publishers or "walled gardens" such as YouTube, Facebook, and Instagram. We were hoping that the news, media, and blog sources conducted thorough research on the matter. Some of the sources we consulted included Search Engine Journal, Fortune, Forbes, Medium, and the Washington Post, among others. Though we came across reports, articles, and blog posts discussing monetization and independent content publishers, mostly focusing on YouTube, none of them presented any useful information to help us determine the number of independent content publishers that had to shut down because they could not monetize their content. Also, many of the reports, articles, and blog posts focused on affiliate marketing.

Afterward, we attempted to use a triangulation approach to answer the question. We wanted to find useful data points to help us calculate/estimate a figure, such as the percentage of independent publishers that shut down due to the inability to monetize content on "walled gardens" vs the total number of independent publishers using "walled gardens." For this, we searched for reports and studies from various research groups, including those listed above, as well as those published by certain entities that operate as "walled gardens", such as Facebook, YouTube, and Instagram. This research strategy did not yield the results we were seeking as we were unable to find any relevant figures to use for a triangulation. Nevertheless, we came across information highlighting some of the hurdles to monetizing content.

Throughout our research, we were unable to find many noteworthy statistics surrounding the difficulties of monetization for independent content creators/publishers, but we did find commentary on the matter.
Part
02
of two
Part
02

Monetization Failure

Facebook generates an average of $0.31 of revenue per ad while content creators generate an average of $3 of revenue per ad. Details of findings and calculations have been provided below.

Facebook Ad Revenue

  • In 2019 Facebook generated $69.7 billion in ad revenue.
  • According to recent statistics, 98% of all Facebook's revenue comes from ads.
  • In Q1 of 2020, Facebook generated $17.44 billion in ad revenue.
  • There are 1.73 billion active daily Facebook users which click on an average of 11 ads per month.
    • Average annual ad total: 1.73 billion*11=19.03 billion monthly ads; 19.03 billion*12=228.36 billion ads per year.
    • Average revenue per ad: 69.7 billion/228.36 billion=0.3052 or $0.31 per ad.

Content Creator Ad Revenue

  • On Facebook, content creators make $1-$5 per ad impression.
  • The average revenue per ad impression for content creators is $3 (1+2+3+4+5=15/5=3).
  • Details of content creators' actual average ad revenue per year are not available publicly.

Ad Revenue Comparison

  • On average, Facebook makes 10.33% of revenue from content creators' ads (0.31/3=0.1033)
Sources
Sources