Ep 577: Why Content Targeting on YouTube Is Beating Cheap CPVs

Summary

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DTC Podcast Ep 577 Summary

Episode Title: Why Content Targeting on YouTube Is Beating Cheap CPVs
Date: January 16, 2026
Host: Eric Dick (DTC Newsletter and Podcast)
Guest: Douglas (Leader, Pilothouse Google Team)

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Main Theme

This episode explores the evolution of YouTube advertising strategy, particularly why focusing on the content people are consuming outperforms traditional audience-based targeting—especially when using premium products like YouTube Select. Douglas shares tactical insights gained from Pilothouse’s experience, emphasizing the role of contextual congruency and quality over chasing low-cost impressions.

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Key Discussion Points & Insights

1. Mindset Shift: Audience vs. Content Targeting

• Douglas’s Thesis:
  “We should care more about the content that people are consuming when we are placing ads on that content than necessarily the interests of the audience that we're trying to target.” (00:00, 01:47)
  • Rather than targeting broad audience interests (like "sports fans"), align ads with specific content that matches your brand and buyer persona.
  • Even with heavy audience exclusions, low-quality or irrelevant placements are hard to fully avoid.

2. What is YouTube Select?

• Description:
  “YouTube select is essentially lineups of the top 5% of consumed content on the platform. So it's essentially premium YouTube inventory.” (03:12)

  • Uses pre-built content "lineups" by topic/category.
  • Primarily content-aligned rather than strictly demographic.

• Cost Factors:

  • “You're looking at between 40 and $60 CPMs... But we are, despite those higher CPMs, seeing much stronger measurable performance from this work than CPMs that are 10 times lower.” (03:42)
  • Lower demographic precision = cheaper rates. More granular targeting drives cost higher.

3. Limitations of Cheap CPVs and Low-Quality Inventory

• Pitfall of Cheap Views:
  • “If you go too far down the quality ladder... you have content being consumed passively on YouTube… might not even be the intended target for the ads.” (04:42)
  • High volume/cheap impressions often include passive viewers (e.g., people using YouTube as background noise or to fall asleep).
  • Placement targeting can’t be totally foolproof, but focus can be shifted toward more rigorously selected, higher quality contexts.

4. Campaign Structures: Prep Over Platform Hacks

• Preparation is Key:

  • “Most of the work comes from doing the work before you launch the campaign.” (06:34)
  • Deep research on consumer behavior and channel preferences yields better content alignment.
  • Successful campaigns rely less on intricate in-platform tactics and more on strategic audience-content fit.

• YouTube Select Deployment:

  • Often run in "flights" (campaign bursts), similar to TV, rather than always-on or highly fluid daily budgets.

5. Content Customization: Align Creative with Placement

• Aligning Ad Creative:

  • “You absolutely have the ability to customize your creative assets yourself, but you don't have the ability to say, I want to pick some sports content and some beauty content [in YouTube Select].” (11:35)
  • The best practice: Match or tailor ad creative to the nature of the content being placed against.

• Tactical Example:

  • “We've got creative geared towards grilling and cooking, therefore we should place that content on placements that is aligned to the grilling cooking audience.” (12:11)
  • Push for creative to feel native—or at least logically congruent—to the viewer's current content experience.

6. The Broader Google & Meta Synergy

• Funnel Synergy:

  • “It just has nice synergy where they're both or both are typically deployed as lower funnel performance based platforms… Meta does a good job of pushing the message out and creating demand, so it's just nice synergy…” (13:50)
  • Meta (Facebook, Instagram) excels at demand generation; Google captures it (especially via Search).

• YouTube’s Dual Role:

  • YouTube is unique in straddling both demand generation (with video) and demand capture (through search/shopping).

7. Scale Questions with YouTube Select

• Scalability:
  • “If you are a pretty broad appeal… you're not going to run into a huge ceiling being able to scale… If you're too niche… you're going to run into scale ceiling issues.” (15:09)
  • Niche brands may hit audience ceilings, but most larger/broader brands can scale campaigns on premium inventory.

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Notable Quotes & Memorable Moments

• On the fundamental approach:
  “No matter how prescriptive you are, no matter how many scripts you run to exclude certain bits of content, you're never going to escape all of it.” – Douglas (00:00, 05:56)

• On cheap CPV traps:
  “People are going in, they're setting up these high view rate, low cost campaigns and they're saying, hey, look at all the eyeballs I got. And I see that as being minimally impactful to the back end.” – Douglas (05:44)

• On campaign setup:
  “It's almost that pre-campaign launch work that is more important than the actual campaign launch.” – Douglas (06:34)

• On creative alignment:
  “If we know we'll be placing on X, Y, Z type of content, we want to have creative that reflects the content that it's being placed on. So it's all about fitting naturally into the platform, right?” – Douglas (12:11)

• On Google’s direction:
  “There's definitely an appetite for Google to push YouTube generally… I think they see what other platforms are doing when it comes to Instagram TikTok and they want to probably eat into that market share…” – Douglas (09:51)

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Key Timestamps

| Timestamp | Segment/Topic | |-----------|-----------------------------------------------------------| | 00:00 | Douglas’s thesis: content > audience targeting | | 03:12 | What is YouTube Select? | | 03:42 | Cost of YouTube Select & why quality delivers ROAS | | 05:44 | Cheap CPVs = passive, low-engagement views | | 06:34 | Campaign structuring: upfront audience/content research | | 07:49 | Content/creative alignment strategy, limitations there | | 09:51 | Google’s broader shift, the push for YouTube | | 11:35 | YouTube Select: creative customization vs placement | | 12:11 | Tactical examples of creative/content fit | | 13:50 | Google & Meta synergy in the marketing funnel | | 15:09 | Scaling challenges/opportunities with YouTube Select |

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Closing Takeaways

• Quality over quantity matters considerably in YouTube advertising—focus ad spend on premium, relevant content, even if costs are higher.
• Upfront, strategic research into your target customer’s content habits will outperform “hacks” or purely interest-based targeting.
• Tailor creative to fit the context of the content lineup for better engagement and impact.
• YouTube Select offers powerful reach for brands with broader appeal, but niche brands may run into scalability challenges.
• The synergy between Meta and Google (YouTube/Search) strengthens holistic funnel marketing strategies, combining demand creation and demand capture.

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This summary delivers tactical insights for marketers seeking to improve performance on YouTube and adjacent platforms by focusing on content congruency and premium inventory targeting, as discussed by Douglas and Eric Dick on the DTC Podcast.

Transcript

[A]

We should care more about the content that people are consuming when we are placing ads on that content than necessarily the interests of the audience that we're trying to target. No matter how prescriptive you are, no matter how many scripts you run to exclude certain bits of content, you're never going to escape all of it. So I've just kind of pivoted the mindset to focus more on showcasing on quality content, but also content that just aligns with the brand and the Personas that you're targeting.

[B]

This episode is brought to you by contentful marketers. You know that feeling when your creative clicks, when that social post sends engagement through the roof, when your outside of the box campaign hits ROI positive, when a personalized homepage turns prospects into customers. It's utter marketing bliss. Contentful helps you create tailored omnichannel experiences without working overtime. No stress, no limits, only possibilities. Get the [e-mail] it's all killer, no Filler I'm Eric and I'm here with Young Douglas. You're not that young I guess anymore, but you lead the Pilothouse Google team. Welcome to the All Killer no Filler podcast. How you doing Doug?

[A]

I'm doing well, thank you for having me, as per usual. And young Douglas, I like closing in on 30, so I'll keep young Douglas as long as I can.

[B]

Well, you're sub 30 then you definitely qualify as Young Douglas. But so today we're talking about Google. We're talking about some of the shifts happening in the ecosystem and why targeting based on what people watch is outperforming targeting who Google thinks these people are. What's your overall thesis here, Douglas?

[A]

Yeah, my thesis is that we should care more about the content that people are consuming when we are placing ads on that content than necessarily the interests of the audience that we're trying to target. I think when you target content, you're being much more prescriptive about the interest you're showing an add on as opposed to when you're looking at targeting people who like sports, why not focus in on content that you know is sports related? Right. So yeah, we've definitely found some interesting results via a bit of a change in mindset on that front.

[B]

It's age old stuff, congruency. We're seeing it across every platform, you know, as we talk about different kinds of audience avatars and making sure that you're building your, you know, your ad campaigns around these right down to the, to the post click experience as well. So it makes sense that it's that it's working in, in the Google environment well as well. Where does YouTube select come in? Because this is one's interesting because I've only back in the day I've advertised on YouTube a little bit. And my biggest problem, as we've talked about on the, on the platform, was just the sort of more indiscriminate spend that would happen or the spend that would happen on really low quality, you know, toddlers who are asleep watching something, or really low quality inventory bleeding into this. So how does, what does YouTube select? I guess.

[A]

Yeah. So YouTube select is essentially lineups of the top 5% of consumed content on the platform. So it's essentially premium YouTube inventory and it is deployed via lineups of channel subsets as opposed to being deployed towards any content on the platform. You can still align it to particular demographics and what have you, but primarily it's aligned to content. At the end of the day.

[B]

How much more expensive is it?

[A]

It is pretty pricey. The more you layer on the demographic details, the more of a premium you're charged as well. So if, for instance, you're a broad appeal brand that can serve to demographics from 18 through 65 plus, then you're going to be able to serve at a cheaper rate. However, if you're being very precise about the demographic you're targeting, you're looking at between 40 and $60 CPMs. So it's pretty hefty. But we are, despite those higher CPMs, seeing much stronger measurable performance from this work than CPMs that are 10 times lower. And it is somewhat intuitive, right? Like you're paying for quality, you're going to get more quality performance. I think that there's just been a false perception that if you buy enough, enough eyeballs, it's going to come out in the wash and you're going to see performance. And I don't fully believe that's the case. If you go too far down the quality ladder.

[B]

And YouTube has a very long quality ladder.

[A]

Absolutely. Like, like we've talked about previously to your, your point as well. Even earlier on in this very podcast, you have content being consumed passively on YouTube. You have it being consumed by people who share a device who might not even be the intended target for the ads being served on that content. And Google knows this. So when you go in, you say, hey, Google, give me a $0.01 or a tenth of a cent CPV or a $1 CPM. Despite you being extremely stringent on the parameters for hey, I just want to go after affluent men in Minnesota, you will still get that in terms of what's reported back to you in the platform. But that doesn't mean that the people you serve to were engaging with the content at that very moment. So that's where I see, or I have some concern is that people are going in, they're setting up these high view rate, low cost campaigns and they're saying, hey, look at all the eyeballs I got. And I see that as being minimally impactful to the back end. At the end of the day, I.

[B]

Am one of the people that needs or quite often uses a YouTube video to fall asleep. And I would imagine unless besides the psychic driving value that you'd get from being in my ears while I sleep, you're not getting as much value from that.

[A]

Yeah, absolutely not. So I've spent hours and probably days at this point going through placement reports for different brands that we've audited for our own brands. And you just can't, no matter how prescriptive you are, no matter how many scripts you run to exclude certain bits of content, you're never going to escape all of it. And so have just kind of pivoted the mindset to focus more on showcasing on quality content, but also content that just aligns with the brand and the Personas that you're targeting.

[B]

Okay, so let's talk about it. So what has a successful campaign structure kind of looked like leveraging this YouTube select inventory?

[A]

Yeah, so the campaign structure is honestly not a significant part of the work. Most of the work comes from doing the work before you launch the campaign. It's diving into, okay, where is our consumer? What do they care about? The better you understand who you're trying to target, the more insight you can gain from Google working with your reps. If you're of a reasonable stage of growth, you can gain insight into what type of content they're consuming on YouTube down to the very specific channels that, that are more highly indexed as compared to the general population. It's almost that pre campaign launch work that is more important than the actual campaign launch. The campaign launch itself is almost similar to a TV flight, to be honest. That's another point of clarity. It's not exclusively flight based, but YouTube select is typically deployed in flights as opposed to daily budgets and adjusting bidding. So yeah, I would say that it's less so around hacks with the campaign setup and more so around doing really deep strategic work, understanding your customer and what type of content they're consuming and feeding those insights back into campaign build in the first place.

[B]

I was going to say it sounds like, like I've heard a lot of good things about streaming and it sounds like this is a filter to kind of give you a bit more of that experience. It's interesting that they run it in flights. Talk to me more then about the content strategy with this content targeting. How many of these YouTube select sites, like are you going right down to the streamer level or are you just doing it like, you know, sports streamers and then you make the ad a little bit about sports. Talk to me about how we build content for these.

[A]

This content targeting the lineups work, they're pre made so we don't have the ability to create our own custom lineups. However, I'll maybe add a tidbit on that in a moment, but essentially how it works is let's say you have a product that you know resonates with people who are interested in sports. You can serve on the sports lineup and then the other component that we see a lot in TV advertising, but I think we see less of in YouTube advertising outside of maybe the golf niche. The golf niche on YouTube, the YouTube advertisers there. Tacomo, I think is one that springs to mind. This is me as someone who's not a golfer but for some reason consumes golf content on YouTube. You can see that they tie the content directly to the placements. And I think that when we're looking at the actual creative itself, there is a deeper benefit to aligning the creative to suit the content that's being placed on. So the tidbit I'll add to that is while we can't make custom lineups at this current point in time for YouTube select, what you can do is still gain the insights from Google or through your own research in the wild to discover, okay, where are my potential consumers consuming content on YouTube? What channels are they watching? What type of content do they consume? And you're still able to use content placements not via YouTube select but via standard skippable and stream non Skippable and use those placements specifically. And I do advocate for going down that route as opposed to targeting based strictly on interest.

[B]

Why do you think Google's making this shift?

[A]

I don't know if it's entirely a Google shift as much as it is a podhouse shift. I would say the broader shift at Google is certainly towards pushing YouTube and I was going to say demand gen, but demand gen just facilitates YouTube via YouTube shorts and skip BulletinStream, what have you. There is definitely a push from Google to direct advertisers through YouTube. It's just more creative. If we look at search and shopping over time, it's going to continue to be more and more automated, less gamable. Whereas I feel like creative is always going to inherently reflect strategy to some degree. You've probably heard other people at Palette House say that in the past, specifically within our strategist team. And so there's definitely an appetite for Google to push YouTube generally. I think they see what other platforms are doing when it comes to Instagram TikTok and they want to probably eat into that market share and they don't want to completely lose out on monetizing all of the consumption taking place on YouTube. And so yeah, there's definitely that push towards YouTube broadly, but I don't think it's necessarily towards placement content. I think they will still advocate for a fair bit of audience focused targeting as well.

[B]

I guess it just gives them the most leeway. Right. They're going to want the thing that they can put the most slush in while still having it pay the bills in a way, if you know what I mean.

[A]

Exactly. Like if we say, hey, we just want to target guys who are interested in sports, that's a far broader population than people actually actively, in that moment consuming sports content on YouTube. Right. So they're able to monetize much more based on audiences than they are based on content.

[B]

So did you say you aren't able to customize the creative specifically for this.

[A]

Inventory or you are, sorry, you are able to customize the content? It is the placement that you don't have an ability to customize via YouTube. Select via standard YouTube. You can pick your YouTube channels, your YouTube videos, whatever, and serve on those specifically. You absolutely have the ability to customize your creative assets yourself, but you don't have the ability to say, I want to pick some sports content and some beauty content. Yeah, exactly, exactly.

[B]

Okay, well give me an example then. I know it's going to be pretty simple, but give me an example of a way that you changed creative to reflect what content was being viewed.

[A]

Yeah, it was almost for a lot of the brands that are in our ICP that make video content, a lot of the time they're making some of this stuff for TV and then they're sharing it with us. And so it was almost more akin to, okay, we've got creative geared towards grilling and cooking, therefore we should place that content on placements that is aligned to the grilling cooking audience. So in the more recent examples that has been more the case of we are prescribed the creative and aligning the placement of that creative to the creative content itself. However, I would recommend that if you do have a seat at the creative table, and certainly what we will be advocating for more going forward is if we know we'll be placing on X, Y, Z type of content, we want to have creative that reflects the content that it's being placed on. So it's all about fitting naturally into the platform, right? It's the same story with like UGC on Facebook Feeling natural, right? UGC on YouTube Feeling natural. Skippable in stream probably being more akin to TV because it feels unnatural if it's too focused on UGC and too scrappy. But yeah, I think at the end of the day it just comes down to making sure that the creative reflects the content it's being served on.

[B]

Anything else going on on the Google side of things that you're pumped about? I just saw an ad today actually that was for Pilot House that was featured Grayson talking about how Meta and Google work together specifically. This might be its own podcast with both of you, but give me that from your perspective. Why are we bundling more often Meta and Google together?

[A]

It's just got nice synergy where they're both or both are typically deployed as lower funnel performance based platforms. Obviously when we think of Google being the most lower funnel, it's branded search, right? You're capturing demand, so it's a demand pull, you're pulling demand in that is already out there in the ecosystem. Whereas meta does a good job of pushing the message out and creating demand. So it's just got nice synergy of platforms like Meta, TikTok, even YouTube. Which is why Google's maybe a bit of a dual threat platform is you have the demand generation component of YouTube and the demand capture component of search and shopping. And so the demand creation from Meta just synergizes nicely with the demand capture of Google. If you have demand generation without demand capture, you're probably going to be missing out on part of the funnel and vice versa. If you have demand capture but you're not able to create demand and consideration for your product, the demand capture on its own isn't going to be as effective either.

[B]

And I feel like YouTube select is a pretty strong evolution for YouTube because it addresses, I think, the quality issue that might hold back some of the bigger partners from. From scaling there. What's the scale like? That's. That'd be another question. Are you able to really scale up on YouTube Select?

[A]

Depends on how narrow your population Size is right. Like if you are a pretty broad appeal. For instance, to go to my previous example, if you appeal to all age groups and people who are interested in sports, you're not going to run into a huge ceiling being able to scale into that population. That population is very active, consuming content on YouTube. Maybe if you're trying to spend a significant portion of. Of ad spend in a very narrow window, but generally there's, there's pretty significant scalability for some of these broad audiences. If you're too niche or if you're the type of Persona that your product appeals to is going to be very narrow. I would say that you are going to run into scale ceiling issues at some point. But for most of our larger brands, it's not a significant concern at this point in time.

[B]

Well, thanks for coming and giving us these Updates on the YouTube ecosystem. Now go look at our dynasty fantasy pool and figure out what I need to offer you to trade me Brad Marchand.

[A]

All right. You know, I want him off my team. I'm a, I'm a Toronto guy through and through, so any, any Floridan or Bostonian, I'm happy to, maybe not happy to get rid of, but I'll make the trade there for sure.

[B]

And to give the listeners just a little context, I'm challenging in this pool that I've been in for 20 years. I have a chance to win this year and I feel like Marchand is the asset that takes me over the top. You're decidedly in a rebound building phase, would you say, Douglas?

[A]

I would say yes, but that's also been the case since I joined the league. So I'm feeling a bit like Vancouver Canuck right now.

[B]

Oh, my God. Well, it took me about five years to ascend from where I'm at now or where I was at when you started to where I am now. So there is hope. I'll just, I'll say that there is a path back.

[A]

Hybrid retool is what I'm after.

[B]

That's a hybrid retool.

[A]

Was that.

[B]

And that's what agencies and brands should be thinking of doing maybe with their YouTube campaigns.

[A]

There you go.

[B]

It's a hybrid retool swapping in, you know, some more of this YouTube Select Invent inventory shifting from interest to content targeting. And hopefully now people listen to that rant because I think there's some good at the end.

[A]

Absolutely.

[B]

All right, thanks, Doug.

[A]

All right, thanks, Eric.

[B]

Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer Co. And if you want to learn more about Pilothouse's all killer no filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.