Advertisers arrived at YouTube's NewFront presentation on Wednesday night already aware of the Google-owned video service's 2015 NewFront sales pitch.
With Google Preferred ad package, they'd be buying millions of views across the top 5% of YouTube's channels bundled into 12 content categories.
So YouTube used its NewFront to remind them who they're buying: millions of people in that coveted 18-to49-year-old demographic who aren't watching as much TV as they used to and are more passionate about these YouTube stars than they are about a TV show.
YouTube CEO Susan Wojcicki said that YouTube reaches more people aged 18 to 49 years old in the U.S. on mobile alone than any cable network, according to a Google-commissioned panel survey conducted by Nielsen.
Some of the biggest YouTube stars, including Grace Helbig and Justine Ezarik (aka iJustine), took the stage at the Theater at Madison Square Garden to tell the audience their YouTube origin stories and how they built their audiences to be so big that those audiences transformed them into big-time celebrities, as evidenced by Ms. Helbig's weekly talk show on E! and a book that became a New York Times bestseller last year.
The front row at YouTube's NewFront wasn't offered to advertisers who committed the most money or agencies who represent the biggest brands. It was given to real-life YouTube fans. That created a physical reminder that was front-and-center throughout the show as executives like Ms. Wojcicki and YouTube Head of Content and Business Operations Robert Kyncl pointed out that audience's enthusiasm while discussing some of the service's biggest stars.
But it was one of YouTube's biggest stars -- and an actual mainstream celebrity in his own right -- that really drove home the point. John Green, the author of the best-selling novel and a huge Hollywood hit "The Fault in Our Stars," told the more than 2,400 people in attendance not why they should advertise on YouTube but instead "what will happen to you if you don't."
Mr. Green explained how he and his brother Hank have used their YouTube fame to create a 30-plus-person company, run the online video industry's premier event VidCon and set up charitable organization Project for Awesome. And "for the most part we have done all of this without advertising," he said, emphasizing the strength of his and his brother's audience.
Other YouTube creators have established similar strong audiences, but "many of the strongest communities and the ones I value the most are undervalued by advertisers," he said.
That disconnect is leading more YouTube stars to find other non-advertising revenue streams like merchandise sales and book deals, and they're finding that these money-makers can not only offset but replace advertising dollars, to the point that the money Mr. Green's and his brother's company makes from advertising has purposefully dwindled by 5% with each passing year and accounts for less than 20% of its revenue.
"In short [YouTube stars] are building a world where they don't have to depend on advertising and they are thriving," Mr. Green said. He concluded his fire-and-brimstone speech with a silver lining for advertisers. If brands can find ways to develop relationships with this audience -- as Mr. Green, Ms. Helbig and Ms. Ezarik have done -- he said, "you will win over this generation as you have won over generations in the past."