[Opinion] YouTube Undisclosed Sponsorships and Professional Managers

▲Kim Chang-hee, Professor, Department of Business Administration, Incheon National University

"If a boy misbehaves, he goes to a juvenile detention center, and if a college student misbehaves, he goes to graduate school." Anyone who has experienced graduate school life might have heard this joke. Graduate school life is by no means easy. The confident undergraduate version of myself gradually shrank as I realized how little I actually knew in academia, making it a psychologically challenging time.

To relieve the accumulating stress, the method I chose as a graduate student was food. I ate and ate again. As a result, my weight increased by nearly 20 kg compared to before entering graduate school. Realizing this was not good, I started looking for alternatives, which led me to find vicarious satisfaction by watching mukbang videos on YouTube. Watching YouTubers eat deliciously and in large quantities became one of my few personal ways to relieve stress.

Gradually, the number of YouTubers I subscribed to increased. Although I don’t watch them often now due to a busy schedule, it has become a hobby I enjoy during my breaks. However, recently, the mukbang YouTubers I used to enjoy all started uploading videos with a black screen and the message "Sorry." Curious about what was going on, I found out that the issue started when one YouTuber exposed the reality of so-called "backdoor advertising," sparking a controversy over paid advertisement disclosures.

Backdoor advertising refers to cases where, despite receiving sponsorships or advertising requests under YouTube policies, creators do not disclose paid advertisements. In other words, it is a consumer deception act where videos are presented as genuine reviews or recommendations while secretly receiving advertising fees and pretending they are not ads. The reason backdoor advertising has become rampant is simple: it values short-term gains over sustainable value.

In the past, Xerox faced bankruptcy after hiring a new CEO. The new CEO tried to grow Xerox rapidly by firing employees and excessively introducing performance-based systems. These actions were all aimed at short-term results, and during this period, Xerox even experienced an accounting scandal and other hardships.

YouTubers are similar to professional managers. They likely started their channels based on expertise in a certain field, which is akin to the professional management capabilities of a CEO. Also, professional managers differ from traditional owner-centered management systems in that anyone can become a company manager through effort, which is similar to how anyone can become a YouTuber. We live in a world where anyone can be a YouTuber.

Surprisingly, the drawbacks of the professional management system resemble the recent backdoor advertising scandal among YouTubers. The biggest disadvantage of the professional management system is that, since the manager is not the owner, they feel pressured to deliver results during their tenure, which can lead to reckless management and even bankruptcy, as seen in the Xerox case. Additionally, professional managers may engage in opportunistic behavior for personal gain, which parallels the backdoor advertising issues among YouTubers.

However, the biggest difference between YouTubers and professional managers is that most YouTubers are the owners of their channels. In other words, they do not need to focus solely on short-term financial performance and can invest sufficiently in the long-term capabilities of their organization. The fact that they failed to do so is subject to criticism. When YouTubers, like professional managers, invest in long-term value to develop the core competencies of their content and channels as owner-managers with specialized knowledge and experience, they will be loved by viewers and become enduring creators.

This content was produced with the assistance of AI translation services.