A thumbnail, in this sense, is the tiny image that shows up on any YouTube page to the left of the title of any video. Thumbnail cheating is the act of using a misleading or blatantly sexual image as your thumbnail frame. Each video has a thumbnail image associated with it—one that is taken automatically from a single frame in the video. YouTube allows you to choose between three points in your video to act as the video's thumbnail. The first choice is the 25 percent point, the default is the 50 percent point, and the third is the 75 percent point. Knowing these percentages, video creators, while editing their videos, are able to insert images that they want to appear as the thumbnail. Some users will insert appropriate thumbnails that do relate to their video's content, but other users simply choose to insert an image of a scantily clad young woman or a close-up of her cleavage.
Along with the video's title, the thumbnail is usually the biggest factor in determining whether viewers will watch your video. It has been proven many times that using a sexually suggestive image as your thumbnail will result in thousands or tens of thousands more views on a single video than a natural thumbnail from the video would produce.
YouTube is clear that it does not condone this practice. The community guidelines on YouTube, www.youtube.com/t/community_guidelines (URL 9.2), state the following:
"Do not create misleading descriptions, tags, titles or thumbnails in order to increase views."
Even with this guideline in place, many YouTubers still "game the system" by using misleading thumbnails. When flagged, YouTube has removed or unmonetized videos using such techniques. But this guideline is largely ignored. The YouTube administrators have limited time to police a lot of YouTube real estate, and there are much more serious violations to worry about. Using a misleading thumbnail on occasion, especially for comedic purposes, probably won't get you too much flack, but repeated use or abuse will most likely upset the majority of your subscribers.