YouTube is on the Rise in LatAm, But Original Content Remains Scarce

YouTube's John Farrell talks the platform's prowess in LatAm, advertising opportunities, and why original content is still lacking.

Online video penetration rates in Latin America are skyrocketing, demonstrating the size of the opportunity at hand for advertisers to reach new audiences.

At the helm of YouTube’s Latin American operations since 2012, John Farrell is responsible for developing audiences and growing the online video market in the region. Also in charge of partnerships, he works to attract principal offline content creators to YouTube. Farrell is an active Endeavor mentor, forms part of the Angel Ventures investment committee, and is a member of the YPO.

YouTube’s strategy for the region, advertiser relations and the production of content in LatAm were among the topics Farrell discussed with PulsoSocial.

Clarisa Herrera: Is Spanish-language content still lacking? How are we doing as compared to other markets?

jfJohn Farrell: When you look at all of the content on the platform, there is a disproportionate amount of Spanish content, though there are a few cases of global success. Considering that nearly 70% of what we’re consuming is imported from the U.S., we realize that there exists a demand that is not being satisfied. It’s the glass half-full or the glass half-empty. I had hoped that, at this juncture, we would have more Spanish content. But at the same time, it’s an opportunities for Spanish-language creators to reach audiences.

CH: Part of your role is to bring content from the offline realm to the web. How is that integrated into YouTube’s regional strategy?  

JF: We want to connect everyone in Latin America with the content that interests them most. The base of YouTube users is one of one billion people who watch more than one billion hours of video on a global level. Latin America isn’t far behind. Eight out of 10 people in Latin America already consume video on the platform. What is very interesting for me in my role is that our ecosystem is highly varied. Some of the content we’re bringing to the platform is traditional stuff – what I mean is that television stations (Televisa, Televisión Azteca, SBT) see in our platform an additional distribution channel, a window for them to connect with younger demographics. It helps them to generate interest in their main screen. It’s an important pillar of the ecosystem.

CH: What’s happening with the stars born out of the platform?  

JF: They’re vital. We have a new generation of content creators, like Hola, soy German in Chile, who’s reaching 10 million subscribers and has a bigger audience than any cable channel in the region. Every video he posts on Fridays can reach six to seven million visits. We also have new creators in Mexico. Yuya gives beauty and fashion tips for Mexico and the entire region. Definitively, we have a wide variety of players – the classics looking for a new screen and this new generation of creators. Music is important, too. In Argentina, we’ve got the case of FaroLatino, which helps independent producers find a space on the platform.

CH: How do you capture and monetize these new creators?  

JF: We can look at it on various levels. The first is an aggregate audience. The advertisers we work with in the region – Procter & Gamble, Unilever, Coca Cola – want to communicate with young audiences, let’s say between 18 and 30 years old. So what we do is take care of is reaching that audience. Regardless of who we’re dealing with, it’s the right target for accomplishing what the advertiser wants. Later, we sell and reserve specific content that interests them. There’s also the possibility of integrating their products in videos. We want our creators to be successful, and we’re open to allowing them to do these types of product presentations – with care, of course, to avoid alienating the audience.

CH: In the case of television networks, do they produce their own content for the platform or replicate what’s on the TV?

JF: We have both cases. On the one hand, YouTube has become a repository of videos from around the world, and it’s become a new window of distribution of older content, like El Chavo Del Ocho from Televisa. The number of people looking for content from that series is enormous. In other cases, it’s more recent content (catch-up TV), like, for example, Casi Angeles. After being shown on television, episodes were made available online. The idea is for content to be available to audiences when and how they want.

We have others that are considering original content, like Televisión Azteca, which may launch a series. What’s most interesting is to see the examples where we have programming for both platforms and bring audiences from one to the other. A recent example is that of SPT with The Eliana Show. On Sundays – a very competitive spot in Brazil – there’s a talent show where people present their material on YouTube and can send it to the television, and vice versa. I think that we’re going to see more cases of interactive television where these dynamics take place.

CH: Does entertainment continue to dominate the platform?  

JF: If we look at it from a vertical perspective, entertainment obviously wins out, but we’re also seeing more and more players in sports, news and education (which particularly interests me). In Mexico, we have the case of Math2me. It’s a teacher who was working at a high school in Tijuana and left his full-time job to dedicate himself to making YouTube videos because he was earning more money. Now, his audience is one of nearly 200,000 subscribers, and hundreds of thousands of people watch his videos.

CH: Regarding the advertising within content, it’s generally thought that if the ad is relevant, the audience pays attention. Is that true?  

JF: In that sense, I think the challenge is much greater. When we were growing up, in a world of little media and few options, advertisers put out a TV commercial and lots of people saw it. Today, there are few people who are willing to listen to a message they’re not interested in. Two years ago, we launched the true view format, where ads could be eliminated. If that happens, the advertiser isn’t charged. When we released it, many said it would be the end of advertising on the platform all together, because it gave viewers the chance to opt out. That’s not the case. If it’s relevant for the target, the user sees the content as part of the overall positive experience on the platform. The format is for those that grow the most. The CPM we’re seeing is high.

This text has been adapted and translated by Emily Stewart from its original Spanish publication.