After 11 Years in Digital Video, YouTube Wants to Take on TV-Sized Budgets

This is how it’s challenging the networks

It isn’t always easy to pair up the suits of the marketing world with those freewheeling kids that make the buzziest videos in the digisphere. The two sides—and more importantly, their respective brands—must have chemistry. So last July at VidCon, the annual digital video conference held in Anaheim, Calif., YouTube set up a “speed dating” event, hoping to play matchmaker between advertisers and creators. Among the talent mingling with marketers was Rachel Levin, a rising beauty vlogger who immediately hit it off with the people behind the anti-smoking initiative Truth.

“She wasn’t originally on our radar,” admits Justin Hooper, group creative director at 72andSunny, the agency handling Truth.

She’ll be on just about everyone’s radar this week at the Digital Content NewFronts in New York where YouTube will pitch Levin and other charismatic stars from its creators’ stable at its Brandcast event. Levin, though still a relative unknown, seems like an easy sell—she’s recently entered rarified YouTube air by passing the 1 billion view mark. What’s more, her YouTube subscribers have shot up from 1.9 million to 7.6 million in the past year, and her videos get watched 3.5 million times per week.

Such numbers are why Truth execs cast her for their “It’s a Trap” campaign after learning that, in her personal life, she had little patience for cigarettes. “She had so much enthusiasm and believed in the brand so much [that it] seemed like a total no-brainer to use her,” Hooper says. The commercial has been viewed 6.5 million times (a big number for a PSA) on YouTube since August.

Levin’s secret to success is “only putting out content that I’m super proud of,” she says. “I know what videos my audience likes to see, and I’ve maintained a good connection with my audience.”

On the business level for YouTube, connecting brands to up-and-comers like Levin and her peers—there’s always a need for fresh faces in this business—is central to its burgeoning Google Preferred program. Google Preferred lets marketers buy unskippable pre-roll ads purely against the highest-performing YouTube stars—it will be front and center at Brandcast for a third consecutive year.

While YouTube remains the biggest digital video player on the scene, its goal of chipping away at big, traditional media budgets is particularly important this year. That will be the talk of the NewFronts—especially since Facebook, Snapchat, Twitter and others are also taking serious aim at TV dollars. “If we look at previous years, we saw [advertisers] make a lot of decisions for traditional media upfront and then afterwards look at digital and YouTube,” explains YouTube CEO Susan Wojcicki.

Not anymore. EMarketer expects digital advertising to surpass TV spend for the first time next year, accounting for $77.4 billion—or 38 percent of spend—compared to TV’s predicted $72 billion (36 percent).

“What we’re seeing this year that’s new and different is that we’re being considered right alongside TV—I think this shows some of the change in the market,” Wojcicki says.

On the surface, YouTube’s strategy is intentionally simple for brands chasing millennial cord-cutters. It promises to reach more 18- to 49-year-olds than any TV network on mobile alone. (That boast has grown—last year, YouTube stated only it reached more mobile viewers than any cable network, not broadcast.)

Several under-the-hood changes over the past year, agency and brand execs say, are keeping YouTube’s data game ahead of Facebook—chiefly, better viewability metrics, new programmatic buying options and access to brand and sales-lift metrics.

To quantify the progress, Wojcicki and her team offer several impressive, hot-off-the-spreadsheet numbers. For instance, in 48 out of 52 Google Preferred campaigns measured, the average video promo boosted ad recall by 80 percent. Sixty-five percent of campaigns lifted brand awareness by an average of 17 percent.

Also, YouTube reports that time spent on Google Preferred channels is up 60 percent, and the number of advertisers in the program has doubled in the past year. Within Google’s top 100 advertisers, spend is up 50 percent across YouTube programs.

“The first year or even Year 2 that this launched, it was a lot of advertisers and agencies buying into the concept—[but] it was [also] a bit of a leap of faith in terms of what results it would deliver,” acknowledges Tara Walpert Levy, Google’s managing director of agency sales. “Now, almost all of them have research reports that tell them how well the platform is working, and many of them have taken advantage of our brand lift tool.”

In November, Google began letting advertisers vet their stats through third-party measurement companies like comScore, Moat and Integral Ad Science—instead of taking only YouTube’s numbers into consideration. As a result, 91 percent of YouTube’s ads are considered viewable under the Media Rating Council guidelines, which constitute that advertisers only pay if 50 percent of a video ad loads within two seconds. Marketers are also getting more access to performance numbers such as brand awareness, ad recall and, most recently, sales-lift metrics that track to see if a video drove an in-store purchase.

With those changes complete, YouTube plans to let marketers execute their Google Preferred commitments via its programmatic system, starting at the NewFronts. Agencies will be able to plug first- and third-party data into campaigns that run through Google’s DoubleClick Bid Manager platform—like they already do when purchasing YouTube’s skippable TrueView ads.

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Originally posted by Lauren Johnson at Adweek
1st May 2016