Under Mohan, NFL deal is part of YouTube’s “beachhead of innovation” to showcase streaming, and Shorts, to advertisers

For close to a decade, YouTube had been flirting with the NFL to stream more and more football, but it never crossed the goal line to deliver full-blown games. Now, it has a veritable football feast to stream through NFL Sunday Ticket, coming to YouTube and YouTube TV. For that, YouTube can thank its new CEO Neal Mohan. In November 2022, Mohan, at the time chief product officer for the streaming platform, met with NFL Commissioner Roger Goodell during Google Zeitgeist, an innovation conference in Santa Barbara, California.

YouTube’s Chief Business Officer, Mary Ellen Coe

“The deal wasn’t progressing very fast,” recalled Mary Ellen Coe, YouTube’s chief business officer. “Roger [Goodell] was kind of like, ‘Hey are we going to do this thing or not.’ Neal started painting a vision for what the experience would be like watching NFL games on YouTube TV,” she said. “He talked about how Gen Z, and his son, who is a teenager, watch. They’re on Discord servers. They're on a mobile. They are chatting with friends. … Neal sat and painted this picture.”

Mohan’s alluring digital roadmap led Goodell to ink a multibillion-dollar deal not just for the NFL Sunday Ticket for YouTube TV, its multichannel video programming distributor service with about 5 million viewers, but also to make it available to all of YouTube’s U.S. viewers. YouTube will license NFL Sunday Ticket for at least the next seven years, giving viewers the option to subscribe to the weekly package of out-of-market NFL games as a “primetime” channel through the YouTube app or through YouTube TV.

But Mohan, who three months after meeting with Goodell would become CEO of YouTube, succeeding Susan Wojcicki, isn’t just a closer. He’s seen as a visionary who can explain big picture concepts to an entertainment partner like the NFL and convince it to leapfrog from direct-to-consumer satellite, over-the-top TV, and dive straight to the new internet streaming world. That vision could have repercussions not just for YouTube, but for the world of sports and its viewers.

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Under Mohan, YouTube is developing technology such as “multiview,” which opens four screens inside YouTube TV to stream different games simultaneously. Most connected TV apps have a hard enough time keeping their services running for one hit program, and now YouTube hopes to deliver four at a time. The multiview is already available for some programming on YouTube TV.

Mohan is also the kind of leader who can mediate between two sides of online advertising, publishers and advertisers, according to current and former colleagues. Mohan can listen to a twentysomething YouTube creator’s complaints and weigh those against the YouTube business just as easily as he can negotiate multibillion-dollar sports deals.

“Neal is an operator, and I don’t mean that in a bad way, what he is responsible for he is going to lead and manage,” said Jonathan Bellack, a product consultant who worked with Mohan at DoubleClick, which Google bought in 2008, and at Google. “He is wickedly smart and really attuned to strategy, understanding ‘what is this going to mean over the long term, and where is it all headed.’ And he’s not afraid to make decisions, which in a big bureaucratic company is important, because it’s easy to pass the buck.”

YouTube is in the eye of a quantum internet leap, the kind that seems to come in faster waves as formats change, devices change, consumers change, economies change and the fundamentals of online advertising technology change. In the second quarter this year, YouTube’s ad revenue started to tick back up, following three quarters of year-over-year declines. Ad revenue was $7.67 billion in the second quarter, up 4.4% from a year earlier. YouTube is moving from a mobile, long-form video app into a short video world inspired by the TikTok craze. It’s also jumped to connected TVs with its app and YouTube TV, the subscription streaming service that competes with cable packages.

YouTube has a plan to bridge the two formats, Shorts and TV, and will launch a new Shorts ad format for TVs, according to a YouTube spokesperson. Shorts viewing on TV is soaring, too, up 90% since January, according to the spokesperson.

YouTube’s connected strategy

Mohan is using the newly acquired NFL rights as a springboard for the next generation of YouTube and YouTube TV, which also carry great potential for advertising. YouTube’s main app has 150 million monthly viewers on connected TVs in the U.S., and Mohan has a plan to use the NFL to connect its TV footprint with YouTube’s fastest-growing mobile video format, Shorts, which are the video style inspired by the rise of TikTok.

“Innovation is part of our DNA,” Mohan, 50, said in an interview with Ad Age. “The NFL is an extension of that. So of course, [the stream has] got to be reliable. And where is it going to get consumed, it’s going to get consumed on television screens. It’s got to look really good on those screens. If you want to sign up for it, it has to be seamless and easy. We want to make that super easy from your phone. You should be able to watch it on your TV effortlessly. We are going to bring a lot of the innovation that we brought to live content already, and you see that on things like YouTube TV.”

NFL will also be an opportunity for a subset of YouTube’s creators to post videos related to the games, uniting NFL and creator culture in a way that opens potentially lucrative new ad inventory on family-safe videos.

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In 2014, NFL started its first official YouTube partnership by making clips available on the video site, distributing highlights from games and other content. At the same time, Yahoo and Verizon were crafting deals to stream full games, on the web and mobile devices. In 2015, the first free football game was streamed worldwide on Yahoo.

Over the years, YouTube has played with other strategies to infuse the site with a predictable schedule of creator-made videos, including supporting original, serialized shows starring YouTubers called “YouTube Originals.” But YouTube is not necessarily about appointment viewing. YouTube is about creator-run channels with videos-on-demand, lengthy livestreams, podcasts, and it hosts programs from outside media partners. And platforms are battling to stream football and to snag other exclusive rights to programming whether that’s movies and TV or live sports. In 2021, Amazon won the prize with its deal to stream Thursday Night Football for at least 11 seasons, for about $1 billion a year. Now YouTube is set to feature about a dozen or more games a week through NFL Sunday Ticket starting Sept. 10, a deal reportedly valued at $2 billion a year for the next seven seasons, according to CNBC.

Flight to premium

YouTube’s long pursuit of NFL rights is a good marker for the platform’s massive evolution—from its content to its ads strategy. YouTube has always had trouble convincing advertisers that its user-generated videos were deserving of TV-level ad commitments. The content catalog on YouTube is almost endless, but it doesn’t mean the pickiest advertisers value all of the material, and in some cases they actively look to avoid these videos.

From left: Sean Downey, Neal Mohan and Mary Ellen Coe, YouTube's leadership triumvirate at Brandcast in May.

With exclusive content, including the NFL on Sundays, YouTube has a new lease on premium ad inventory. And it made the NFL a centerpiece of its upfront sales pitch to advertisers and agency holding companies this year; in May, Mohan hosted his first Brandcast, which is YouTube's annual sales meetup in New York, where creators, Shorts and NFL were all showcased for marketers.

Leading up to NFL games, YouTube created its first 30-second, unskippable ads that will only run on connected TVs, establishing a new ad unit that pleases old guard TV advertisers. YouTube said it expects at least 50 advertisers to sign up for ad packages that touch football games and the shoulder content from creators.

NFL Sunday Ticket will be Mohan’s first real test, since taking over as CEO, to show all the working parts of YouTube from Shorts to connected TVs, while still taking care of all stakeholders, including the NFL, advertisers and the 2 million creators who share revenue from ads in the YouTube Partner Program. “There will be Shorts content. There will be long-form content that lives on the NFL channel [on YouTube], but also on the channels of all these creators,” Mohan said. “Of course, there will be the live games, and all of this sort of connected in a seamless experience for our users and therefore advertisers.” Coe, YouTube’s chief business officer, makes an even bigger proclamation: “NFL Sunday Ticket will be in a sense a part of our beachhead of innovation in YouTube TV, which will continue to feather out more broadly,” she said in an interview with Ad Age.

See YouTube’s new Sunday Ticket ads

Coe can already see the potential for the NFL deal to accelerate YouTube’s push into areas such as e-commerce. “Think about being able to interact on stream, watching my favorite team, and then I want to get a jersey, and I can click in, and I can scroll, and I can pull down a jersey, or I can click different accessories and merchandise by team, by league. The interactivity will be so much more than it is today.”

Eventually, viewers will be able to click into games from those Shorts, Coe said, which is a feature that won’t be immediately available but could come in season two.

“We’ve had partnerships with YouTube since 2014, when we first started our YouTube clips deal,” said Brent Lawton, VP of media strategy and business development at the NFL. That channel has 11.4 million subscribers and accumulated more than 8.6 billion video views. “There is definitely some history with YouTube and a real comfort level with their ability to deliver video and ultimately to deliver on that [Sunday Ticket] experience,” Lawton said.

“We’re seeing where the world is going.”

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Mohan: To YouTube and back again

Mohan was in the business of selling YouTube ads since the video site’s start, when he was still with DoubleClick, the online ad exchange, and YouTube was one of DoubleClick’s early customers. This was before Google bought both companies in deals that would transform internet advertising and online video.

In 2006, Mohan first visited YouTube at its startup offices, which were still above Amici’s pizzeria in downtown San Mateo. At the time, Mohan was senior VP of strategy and product at DoubleClick, where he was laying the tracks for the technology that would lead to the most powerful internet ad business in history. YouTube, meanwhile, was in the middle of its online video revolution, and desperate for an ad model. “Before either I or YouTube were part of Google, YouTube was my client at DoubleClick,” Mohan said in an interview with Ad Age, recalling the core moment in his career that would ultimately lead him to the CEO’s seat at YouTube this year.

“They recognized that that was the way that they would have a sustainable product and business, right,” Mohan said, “and an ad model is something that could keep up with their growth from a sales standpoint.” During conversations with YouTube’s founders—Steve Chen, Chad Hurley and Jawed Karim—Mohan recalled being asked, “Hey Neal, are the DoubleClick systems going to be able to keep pace with how fast we’re growing?”

“And I knew then, just from the conversations I was having, that this was a phenomenon,” Mohan said.

Mohan is now faced with the same question he was asked when he first entered YouTube’s startup offices: Are you going to be able to keep pace? Can YouTube keep pace with the speed of TikTok, which has been a mobile video revelation to the world, and has designs on everything from commerce to search. If YouTube had a claim as one of the most powerful recommendation algorithms ever invented, TikTok’s near-infinite feed of videos is also an algorithmic marvel, too.

YouTube also must keep pace in connected TVs, which has seen Netflix enter the ad-supported video competition, and Apple is flirting with ads potentially on Apple TV+. Then of course, in ad tech, YouTube and Google have to keep pace with the changes to programmatic advertising, and the rise of Amazon as an ad tech rival, as well as The Trade Desk, an independent demand-side platform that is an increasingly popular destination for brands to manage connected TV campaigns. And most imminently, can YouTube’s servers keep pace with NFL games? It will be a technological heavy lift to stream up to four games at once on the same screen. In May, YouTube TV had trouble handling game one of the NBA’s Eastern Conference Finals, when masses of viewers reported streams went down. Instead of the game, an ad for Disney’s “The Little Mermaid” reportedly ran on repeat for viewers for an extended period of time.

Sean Downey, president, Americas and global partners, Google and YouTube

Sean Downey, who this year became president, Americas and global partners, Google and YouTube, has confidence in Mohan’s ability to lead the technological revolution at the company. Downey has seen Mohan’s work firsthand since they both worked at DoubleClick before it was acquired by Google.

“What you should know about Neal is, he is deeply innovative,” Downey said. “He cares a lot about the marketplace, the industry, and he wants to change the trajectory so it lifts advertisers, and it lifts consumers, and it lifts publishers, or creators in this context.”

Shorts challenge

One of Mohan’s key tasks is to mature Shorts as a format that can sustain YouTube’s bustling creator economy, and give advertisers a reason to spend money there. Many marketing and technology leaders have compared the current Shorts transition, or in Facebook and Instagram’s case, the Reels transition, to the change that happened when the web went mobile around 2012. Back then, companies were worried that the mobile internet would not monetize at the same level as desktop. There were concerns that companies built on websites, such as YouTube and Facebook, would have a hard time making money on mobile apps. Obviously, there are no such concerns lingering about mobile, but moving from longer videos to short-form has its own growing pains.

In 2020, YouTube launched Shorts, around the same time that Instagram dropped Reels; both moves were to contend with TikTok. Shorts is an important part of Mohan’s NFL strategy.

Shorts and TV are coming together in ways that consumers and advertisers might find surprising—more people are watching Shorts on connected TVs, even though the videos are displayed in an aspect ratio made for vertical viewing on mobile devices. That’s why YouTube has designs on serving Shorts ads on connected TVs, and plans to at least start testing the format by the end of the year, according to a YouTube spokesperson.“When a viewer, particularly a young viewer, comes to YouTube they are not distinguishing between the type of content,” Mohan said. “Their expectation is that all of that content is going to be there, on YouTube. When it comes to video content, they turn on YouTube. When they turn on TV, they’re turning on YouTube. … If they want to watch Shorts, well one of our fastest growing products is Shorts on television screens.”

“If you’re an advertiser that’s what makes YouTube attractive,” Mohan continued.

The Shorts monetization model is different: Creators share a pool of revenue from ads that appear in the fast-moving feed; they don’t get the money from ads that run directly in their videos. The more Instagram and YouTube encourage Reels and Shorts consumption, the more time users spend with those videos, potentially at the expense of more lucrative areas like YouTube’s longer videos and Facebook and Instagram’s main feeds.

In March, Ad Age reported that creators were sometimes seeing 1 cent or 2 cents CPMs, which is the cost per thousand impressions they get from views of their Shorts videos. YouTube creators typically expect $2 or higher CPMs from longer videos, where they can also show more ads. YouTube sees 50 billion Shorts views a day, according to Google’s latest public filing. This may seem like a lot, but there’s still a ways to go, with Reels generating 200 billion views a day on Instagram and Facebook, according to Meta’s latest public filing.

Read more: TV networks, YouTube and measurement

Channeling TV

YouTube has a multi-video format strategy, though, one that transcends social media and online-only video. YouTube is competing in streaming TV against Netflix, Disney+ and Amazon, among many others, which are all chipping away at advertisers for big money by dangling what they consider to be prestigious programming. Netflix reports 238.4 million paid subscribers worldwide, and Disney+ has 146.1 million, according to parent company The Walt Disney Co.’s third-quarter earnings report. YouTube reports 150 million viewers monthly on connected TVs in the U.S. YouTube edges out Netflix in share of time spent watching streaming TV in the U.S., according to Nielsen’s The Gauge report. YouTube represented 9.2% of all time spent viewing TV in July, and Netflix represented 8.5%. of TV time.

Nielsen’s The Gauge

July 2023 snapshot of broadcast, cable and streaming usage via television.

Methodology available at nielsen.com/thegauge.
Source: Nielsen national TV panel data plus streaming video ratings. Percentages may not sum to 100 due to rounding

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“It’s going to be interesting to see how YouTube is going to balance the incumbent relationships it has with creators and digital advertisers, which have been fueling its growth to stay competitive, while going after legacy TV and the advertisers there,” a senior VP ad agency executive said.

Typically, advertisers dip in and out of ad buys with YouTube by using Google’s ad platform—Display and Video 360 (a platform that evolved out of DoubleClick)—to search for cost-effective video impressions, and they don’t necessarily need to act like upfront TV buyers. In real-time ad auctions, brands don’t have to commit upfront ad dollars, which guarantees the delivery of certain ad inventory but it also comes with higher prices, sometimes $25 and up. In the auctions, YouTube’s connected TV CPMs can cost as low as $6, the senior VP agency executive said. “It’s absolutely insane when you think about Netflix’s early CPM asks, which were 10 times that,” this ad executive said.

On YouTube, advertisers are also able to specifically request only connected TV ad units when they set up campaigns. And Google’s ad network has been plugging into more Shorts ad inventory, according to advertisers, offering ad views at even cheaper rates.

YouTube has been dangling incentives in front of brands and ad agencies to encourage them to spend more money through DV360 and Google Ads, to buy more YouTube ad inventory, and to extend those campaigns to other connected TV apps that also offer inventory on DV360. YouTube is giving brands ad credits of up to 2.5% for every dollar they put through the DV360 and Google Ads, according to several advertisers, who spoke on the condition of anonymity.

A YouTube spokesperson declined to comment on specifics of advertising deals.

“Advertisers want to have as many premium slots as they can get, that’s why we carved out YouTube Select,” Downey said, referring to the program that sets aside an upper echelon of user-generated videos only for upfront ad buyers, “but what we show them is that when we use AI-powered tools, we can surface multi-format inventory, whether its Shorts, whether it’s normal creator content on the web or things on streaming.”

“That has a blend of CPMs based on different dynamics,” Downey continued. “Some is reserve, some is auction, and they are happy with the effective reach and effective cost over time, and that’s something that they’re quite comfortable with because they always bought TV that way.”

More news: YouTube CTV ad spending surges

TV or not TV

YouTube’s founders never saw themselves competing directly with TV. In early interviews, Hurley had described YouTube as a complement to TV not a direct threat to it. In fact, YouTube’s first licensing deal was with NBC in 2006 to host clips from broadcast TV.

Today, YouTube is still aggressively pursuing licensing deals with the top media and sports partners, and those deals are more expansive and expensive, such as the one it reached with the NFL Sunday Ticket. YouTube also has “primetime” channels that offer subscriptions for MGM+, Starz and Showtime. Media partners, such as Paramount, can post entire seasons of programs, old and new, to their YouTube channels, which are ad-supported.

The NFL deal “just shows the broadness of the offerings and why viewers are attracted to YouTube,” Downey said. “The clients see that as an indicator that YouTube is as large as we think it is. It’s as important as we think it is, and has durability in terms of having the content that they want long term.”

The NFL package is very much a creator-led content offering in the mind of Downey, at least as far as YouTube’s ad prospects. Of course, there are the live games, but the creators, such as the sports-obsessed Deestroying, aka Donald De La Haye Jr., will make videos based on newfound NFL access.

“Advertisers love seeing the creators next to the NFL,” Downey said. Advertisers know viewers “want to engage in that, and they can have more opportunities to tell stories in front of it,” Downey said.

“We’re trying to put that with creators like Deestroying and make sure that content gets built around it, and that’s something advertisers know will show up and be available to them, and they’re eager to see it,” Downey said.

Mohan is not just out there pressing prestige partners such as the NFL, he also is meeting with YouTube’s creators. They were among the first constituencies Mohan engaged with after becoming CEO in February. By April, Mohan was at Coachella, alongside Coe, filming a Shorts video with creator Eric “Airrack” Decker.

“Like, Neal was the founding father of that whole process, so I think Neal understands the platform, what type of content goes on the platform, and the advertising behind that content, better than anybody else,” Airrack said in an interview in New York. “If you’re trying to make a living as a creator on the internet there’s probably not many better people on planet earth to talk to.”

“DoubleClick was the original company that figured out how to sell ads on the internet,” Airrack added. “So, Neal being the guy who figured that out, like, I think that’s super interesting, like the dude is basically the grandfather of the creator economy.”

Mohan acknowledges he’s not a viral hits maker like his YouTube stars, “whenever I do that, I’m kind of in their hands,” Mohan said. “I don’t have the talent that they do.”

Mohan puts a lot of trust into these creators—at one point in his Coachella video, Airrack rode Mohan’s back for a gag. That was the only time Mohan questioned Airrack’s video direction: “I have a bad back, man,” Mohan said. “We pulled it off somehow.” Now, Mohan has all of YouTube riding on his back. But he’s not alone; Coe and Downey both have history with Mohan, and they bring a distinctive Google pedigree to YouTube.

“We’ve all worked together for a long time in different contexts, but I think the sentiment is, wow it’s a whole new team [but] we feel like an old team,” Coe said. “It’s kind of like getting the band back together.”