Relationship status between traditional advertisers and YouTube stars: It’s complicated.

The solution may be simple — cryptocurrencies and micropayments that skip over traditional advertisers and just let fans fund their favorite content.

We are rapidly moving toward more nontraditional content marketing, especially with  direct-to-consumer content like what’s being created by YouTube superstars today. To say the traditional advertising and marketing model hasn’t caught up with that scene is an understatement.

Where’s the beef?

There’s a storm brewing between content creators on YouTube, with its enormous audience of 1.5 billion, and advertisers. YouTube stars can make a small fortune if they have a huge following. But the digital advertising landscape is quick and nimble, and can stop the flow of money over an F-bomb or offensive hashtag at any moment. And YouTube’s own rules means it can demonetize a site on rules that are considered inconsistent.

Earlier this year, YouTube stars cried foul over a widespread advertiser boycott that curtailed their income. The boycott came after YouTube’s parent Google warned them it could be coming; turns out its own automated technology was placing brand marketing next to extremist content, leading to the widespread advertiser revolt.

Then YouTube tried to remove the offensive content, only to sweep some regular content out of existence.

More recently, after the Las Vegas mass shooting, two of YouTube’s biggest stars — Casey Neistat and Philip DeFranco — took their platform to task for its inconsistencies. Neistat had posted a video talking about the tragedy and linking it to a page where donations could be raised for charity. He also said that any money made off of that particular video would be sent to the charity as well.

Just days later, that video was demonetized by Google/YouTube as well, because the company says it doesn’t allow advertising on videos about tragedies. Neistat revealed that to his fans, and DeFranco took it to his own with this powerful retort: One of the of the most-viewed channels on YouTube was Jimmy Kimmel’s channel and his stirring monologue about the Las Vegas tragedy. And guess what? That channel remained monetized, with unskippable ads shown to every viewer.

You can check out the response here:

That these two stars have millions of fans between them is irrelevant, because the fans aren’t paying for the content, the advertisers are. That’s where fan-funded platforms using cryptocurrencies built on blockchain are poised to disrupt the entire ad-supported content model.

Blockchain 101

  • Blockchain  — a digital ledger in which transactions made in cryptocurrency are recorded chronologically and publicly.
  • Bitcoin — The most well-known of the cryptocurrencies, which are the units of payment paid via blockchain technology.
  • Cryptocurrencies — Digital units of money, essentially, usually called tokens or coins. Bitcoin is the most popular but there are thousands and soon to be hundreds of thousands. How do you get them? You can buy them using an app like Coinbase or  “mine” them, like mine for gold, silver and copper to make coins.
  • Uses — Being best known for buying illegal drugs and gambling, naturally, they have a checkered reputation. But the future holds enormous potential for cryptocurrencies and micropayments for content: People can build up their cryptocurrency accounts to pay for streaming shows, subscribe to video channels and pay for digital news media. Right now, content is funded by advertising and marketing, which ebb and flow with how many people are watching. Even if you subscribe to a magazine, what you’re paying to subscribe is a tiny fraction of that magazine’s revenues; it’s the advertisers who pay the bulk of that. Blockchain could turn that model on its ear.  

Why marketers need to care now

Without a doubt, advertising and marketing agencies should be exploring what blockchain will mean for their business and their brands now. Everyone else will have to play catch up.  

As with all major market disruptions there are some unknowns. Governments anywhere in the world — including China, which recently did — could clamp down on cryptocurrency exchanges or decide to regulate trading in a way we can’t predict right now. If there were a malevolent attack, like what happened with Mt. Gox in 2011, people might lose their trust in it, which would set it back from more widespread use.

On the other hand, the currencies could save institutions struggling right now: The arts and journalism could be funded by individuals instead of traditional deep pockets and corporations, really giving power to the people. It’s straight-up funding of content by consumers, and that’s not the way it works for a majority of content producers today. That could be huge for traditional media like newspapers, many of which are being gutted by hedge funds and beholden to advertisers.

But the bottom line for marketers is that it’s an exciting time for content creators, and for businesses who are into this really wormhole-experience of looking at things from a new perspective looking for the leading edge of where things are headed. For brands and marketers, encrypted micropayments will make much of what we do — mining information, and learning about customers and everything we can about them — really damn difficult. It’s a critical time for all marketers to be playing close attention today, so they don’t get left behind in the near future.

James Clark

James Clark is compassionate, intuitive and fiercely loyal. With that description, he probably should have been a defense lawyer. Instead, he ended up majoring in journalism and taking those skills into the public relations world. James is passionate about the transformational power of truth in storytelling. He is driven by creating valuable relationships.