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YouTube's new ad revenue-sharing program for Shorts creators is its latest effort to rival TikTok. Creators are the key to enticing brands to advertise on short-form video apps.

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Ad buyers say Shorts' rev-share program is bad news for TikTok, and worse news for Meta's Reels. The rapid rise of TikTok has caused a short-form video gold rush. Both Google's YouTube and Meta are racing to attract creators to their competitive offerings in the hopes that consumers and advertisers will follow. YouTube launched its latest salvo to attract creators to its Shorts offering on Sept. 20, when it announced that it will share ad revenue with creators starting next year. Creators can even monetize their videos if it has copyrighted music.

This development also places greater pressure on Meta to attract creators to its short-form video offering Reels, which is the social media giant's great hope of reviving its flagging ad revenue. Insider asked advertisers how the three rival short-form video offerings compare. Here's what they said. TikTok wins with creators and consumers, but advertisers need its ads to perform TikTok's Creator Fund notoriously does not pay well. But TikTok is still their priority for making short-form video content, said Kolin Kleveno, SVP of addressable media for Tinuiti. That has helped TikTok maintain its soaring popularity with consumers and has caused brands to move ad spend to the platform. An April report from Insider Intelligence (which shares a parent with Insider) predicts TikTok's ad revenue will grow 184% to nearly $6 billion this year, topping Twitter and Snap combined.

TikTok's problem is that it struggles to prove that ads on its platform perform, sources have told Insider, so it hasn't been able to siphon that spend yet from Meta's Facebook and Instagram.

A TikTok spokesperson provided a list of brands like Ray Ban and Sephora that saw results advertising on the platform. TikTok is also beefing up products like "Shopping Ads" with automation and artificial intelligence, so they are better at driving clicks. Shorts' revenue-sharing program puts the heat on TikTok TikTok's problem is that it makes creators famous, but once they've gone viral, many jump to YouTube, where they can grow their following and earn more money over the long term, said Rob Jewell, chief growth officer of marketing firm Power Digital. And advertisers predicted that even more creators will jump ship to YouTube Shorts thanks to its revenue-sharing program. More creator interest leads to growing advertiser interest. Ad buyers said most of their clients are incorporating Shorts into their media plans, though it's still too early to tell how these ads will perform. But ad buyers were also confident because YouTube has a proven track record of driving sales. "I think the long-term opportunity is very strong," Jewell said. 

Reels lags behind While core Facebook and Instagram continue to attract performance ad spend, ad buyers said they are just not interested in Reels yet, as the audience isn't there. "No brands ask about Reels, but brands commonly say 'let's try TikTok,'" one ad buyer. "That should tell you everything you need to know." An internal Meta report obtained by the Wall Street Journal shows Reels is far behind in catching up to TikTok's market share with creators. Of Instagram's 11 million creators, only about 20.7% post on Reels each month and few get any engagement, the The Wall Street Journal reported.