Your YouTube View is Worth Its Weight in Gold: Conscious Consumerism in the Internet Age

I've been working in cosmetic retail for a little over a year now, and I've seen and been asked almost everything. One of the most common questions I get asked, however, isn't how to properly use primer or what eyeshadow I recommend; it's whether or not I get paid a commission.

The answer is no. But, our company sells cosmetics and products from a variety of different brands, (over 100 to give you a scope of how much I have to have at least working knowledge of). Since all these names are competing for customers and brand loyalty, they often employ vendors to promote their products. These vendors do in fact work to get commission and have a sales goal in mind; they are working to get the most for their employers - which is why people don't trust us.

If you're selling with a specific end goal in mind rather than just acting like an advisor, people can usually tell. They might buy it under pressure in the spur of the moment, but then they'll come back a couple days later and return it to us. That, coupled with the fact that big corporations are increasingly being exposed as corrupt (hey, Wal-Mart), contributes to the growing power of the online review.

When you walk into a store, you know, or at least assume, that the workers there have an agenda to get you to buy their product. When you use the Internet, essentially a free service, to learn about a product that worked for someone with, say, your specific skin type or beauty needs, you feel like you're listening to a trusted friend.

YouTube reviews in particular have become so popular that many of these users have become YouTube partners. YouTube partners make money through views. When you watch a video, you’re usually forced to watch a 30 second ad about something you’re probably not interested in. YouTube makes money off your view, and with billions watching videos every day, they make a significant amount of money.

Since popular users have millions of subscribers and billions of views, they make up a substantial portion of YouTube’s ad-based income, so really popular channels often become partners. As a partner, they then make a certain percentage of the money generated from ad views; becoming a partner is YouTube’s way of giving back to these popular personalities and incentivizes them to stay active. So how profitable is this?

Insanely. The top earning YouTube partner last year, and for many years before that, was Swedish gamer PewDiePie, real name Felix Arvid Ulf Kjellberg (say that five times fast), who topped out the highest grossing list with $7 million and 5.4 billion views. 

Kjellberg’s videos are often in the incredibly addictive and entertaining “Let’s Play” format. These videos are screen-captured videos of real gameplay along with commentary and reviews. The commentary can range from high-tech critiques of game engines to just plain fun, which is what Kjellberg specializes in. He’s entertaining, and, most importantly, relatable. He doesn’t talk down to his audience, and you feel like a friend taken along for a video game ride.

On the makeup side, YouTube beauty bloggers, also known as “Beauty Gurus” and “Vloggers,” are making just as much profit. What is a Beauty Guru? A Beauty Guru is someone records and uploads reviews of makeup and does tutorials. Makeup has been a multi-billion dollar industry for a long time, and the constant demand for makeup means that Beauty Gurus have become increasingly invaluable for influencing trends.

Michelle Phan is one of the most popular personalities out there. Her makeup prowess has transformed her into actors like Angelina Jolie and Marilyn Monroe to cartoon icon Jessica Rabbit. She has been on YouTube since 2007 and started with one modest video and has grown in popularity exponentially. She currently possesses over 7 million subscribers and has her own line with L'Oreal, an online beauty startup called Ipsy (think along the lines of Birchbox, but much more affordable), and has recently released a makeup book. Last year, her site had 985 million views, and Phan earned $1.3 million, a vast difference from her family’s financial struggles when she was growing up.

YouTube has become a platform for education on products and a vehicle for young, ambitious entrepreneurs to get their faces out to the public and launch their careers. These popular bloggers and YouTubers represent the driving force at the heart of capitalism: If you make it, and people like it, you will get a ton of money for it. More importantly, since most of these personalities' fan bases consist of the highly profitable teenager to young adult age group, it indicates a growing generational shift away from name brand trust to a more democratic type of consumerism. Rather than relying on glossy ads in magazines or TV commercials, consumers are increasingly taking to the Internet to read real reviews from real people, spending time to educate themselves instead of blindly purchasing.

Yet high-income industries have a vested interest in their goods to stay on top. Games, already a multi-billion dollar global industry, are reportedly expected to be worth $100 billion by 2017. The power of video games can be measured by the numbers for the industry’s best sellers. Last year, Grand Theft Auto V was released in September and, over the course of three days, made over $1 billion. The game went on to shatter six Guiness World Records, including best-selling game in 24 hours, fastest entertainment property to make $1 billion, and highest revenue generated by an entertainment product in 24 hours. As such, these companies are allegedly willing to dish out compensation in return for positive reviews online.

Most recently, Kotaku ran a story behind the release of the much-anticipated “Middle Earth: Shadow of Mordor” game. The article reports that reviewers and journalists could get early copies in order to rate the game – so long as the commentary is solely positive in nature, in addition to adhering to other strict guidelines highlighted in the contract. Such caveats include what aspects of the game to specifically focus on, such as the Nemesis System within the game, as well as to express enthusiasm for the franchise in general.

Awards, you say?

Another infamous example is the case of Blair and Elle Fowler, juicystar07 and AllThatGlitters21 respectively, sister beauty vloggers who each have their own channel. The girls are leaders in the art of the “haul,” a video showcasing a recent spending spree on anything from room décor to makeup and clothing. The girls each have over a million subscribers and are one of the most popular beauty and lifestyle channels. In 2010, the New York Times ran an article purporting that the sisters took considerable compensation for their reviews. Brands would approach them and offer to pay per video featuring their product; in one case, a suntan brand reportedly paid Elle Fowler $4,000 for a video review of their product.

So what is a consumer to do? Who can you trust? Certainly, these reports are worrying, but in a system based on blind viewing and public admiration for the personalities, the solution may not be as simple as unsubscribing from suspect channels or exposing them online. Luckily, the FCC has cracked down, and videos that are made for money are required to disclose this information. Even so, I would suggest to keep doing what you savvy customers always do: Do your research on all levels. Check out the reviewers and see what their online reputation is, and don’t let popularity alone fool you. Instead of paying attention solely to what well-paid reviewers say, also look at what consumers are saying, since they have no incentive to write something glowing about a bad product. Above all else, trust your gut. If you don’t like a product, your opinion is the most important one out there. And know that if you come into my store, the only compensation I receive is for the time I spend helping you during my scheduled shift.



© Cultivate Blog 2014