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31/07/2011 by
20355 views

About YouTube, The Indian & The Dead Horse

Thank you YouTube. For drawing big brands out of the box and onto the web. But will you monetize social video advertising from here? Or will your premium content strategy finally turn you from perish to profit?

Besides Google, who else in the ecosystem should really care about social video advertising? Maybe leading brands like Coca Cola or P&G – and global networks like WPP and Omnicom?

Global social video advertising spend will be massive and grow from around $1,5 Billion in 2011, to around $7 Billion by 2015. This forecast comes fromIAB, Nielsen and eMarketer. But not all social video spend is on their radars yet.

Big brands like Unilever and T-Mobile have understood TV Commercials, Audience buying and GRPs for decades. So should we really be surprised that social video advertising will be massive soon? Both brands already pushed 66 Million paid video views each -onto the web- in Q2 2011.

Internet veterans know that ‘new’ internet revenue streams can be off our radars for quite a while. And the same goes for social video spend. Most of that is still being booked under Display advertising at IAB and Nielsen. And if they do not publish it, how will you get it on your radar?

However, if objects are still off our radar, does it mean they do not exist? Declaring them UFOs could also be called pretty stupid defensive tactics.

Even in the cold war it’s all about having accurate intelligence. Realtime ‘intel’ preferably, without latency. And certainly not latency like months or years!

So CMOs that are trying to re-engineer their brand, make sure to embrace social video as a meta trend. Use a videolytics and full social metrics technology like ViralTracker, to get your social video ‘intel’ right.

Other meta trends to watch in the social space are F-Commerce (your shop in Facebook), Social TV, and Social Gaming. And Mobile is your targets’ next gateway to brands, communities and commerce.

So adjust your radars. Since social video is happening with the speed of light. In 2011 leading brands will be serving 10 to 15 Billion paid social video views. So be pro-active and embrace the meta trends. Don’t fall for the surprise attack.

Now back to YouTube.

Since Google acquired YouTube, consumers have been massively broadcasting themselves. But the Millions of eyeballs have never been properly monetized by YouTube.

Why not?
Simply because YouTube lacks strategic commercial brainpower in the field of media and advertising. They are in huge need of a smart Chief Strategy Officer and a Chief Revenue Officer.

But there might be hope for YouTube. Why?

Because Google is building the largest Display and Video Ad Exchange in the world, which includes Audience buying and RealTime Bidding (RTB). And this will certainly make Google a significant player in Display and Video.

But, Video and Social TV are fields Google just does not seem to understand. They might get Google TV right the 3rd or the 4th time. But for now, Google TV is perceived as a piece of crap by many, something that should have stayed offline.

And Google+ has indeed gained a lot of buzz and users lately. But when people start comparing Google+ to Facebook I think: come on, you can’t be really serious about that?!

Google is becoming to look like Greedy Gordon Gekko. And it will really need to re-think its strategic long term approach.

Google, have you really forgotten about the nature of Internet? The Web is owned by the people, not by media owners. People might eventually hate Google’s strive for intrusiveness.

People simply will not accept all the intrusive pre-roll commercials that are blocking the UGC videos they really wanted to see. So Google, your greed is not good. You should load balance your pushy TV commercial approach, because we will massively zap away from your web properties. The Web is not TV.

So do not only push commercials in front of our UGC video content. Do not push your overlays at each web video. It’s simply too intrusive for consumers.

Try to work around the video every now and then. That approach will be more relevant for branding and much less intrusive for users. Google, if you are that eager to claim TV ad spend, look at TV Billboarding and Non Spot TV as well.

An example of around the video or branded skins can be found below. It can be offered very relevant and based on keywords, but way less intrusive. So consumers do not have zap away to avoid another one of your intrusive pre-roll commercials.

If for example Go Fast would buy 500 Million skinned views (branded billboards around the video) – targeted at UGC videos that are tagged with i.e. ‘extreme sports’ – Go Fast might increase it’s aided awareness with +20 in one year. Go Fast might even get a brand lift up to Red Bull levels this way, in a period of 12 months.

Just try it with MetrixLab and see what happens within the exposed target audience. Go Fast might turn from mindshare into heartshare, this way?

And, skinned videos would make YouTube money. And that might fulfill Google’s greedy need for ‘money speed’.

Branded skins would make brands more engaging and less intrusive. And less intrusiveness would make more consumers happy. It could be really simple, to create a triple win like this. But it would need strategic brainpower.

But YouTube is already pursuing the large TV budgets.

Talks of providing $2M-$5M seed funds to agents and producers (Endemol, Howcast, Electus etc) who commit to episodes. So YouTube’s new pitch is: want to buy a web series for $3.5 Million?

Some examples to make the story tangible and concrete?

YouTube has pitched advertisers on funding big-budget web shows featuring stars like Kobe Bryant, Lady Gaga and “Dancing with the Stars” host Brooke Burke, asking millions of dollars to make them happen.

The pitches are part of YouTube’s foray into Hollywood for polished, TV-style web video that can attract the kind of advertisers that devote most of their ad budgets on TV.

The concepts were pitched as branded entertainment, shows created for or in conjunction with advertisers. YouTube is separately trying to seed the market for professional web video by funding as much as $5 million in startup costs for producers to create YouTube content channels around advertiser-friendly categories like food, fashion, sports and comedy.

The celebrity shows that YouTube recently proposed to advertisers – so called YouTube Originals -would make the video site, best known for user-generated content and music videos, look more like a traditional TV network than ever before, according to pitch documents obtained by Advertising Age.

For instance, says Ad Age:

“Dream Makers,” a series in partnership with “Big Brother” producer Endemol that would feature Los Angeles Lakers star Kobe Bryant rewarding “outstanding young people” with with the “dream of a lifetime.” YouTube is asking marketers for $1.7 million to exclusively sponsor a run of six to eight five-minute episodes.

“The Incubator,” a series from Ben Silverman’s Electus featuring 36 short webisodes with 10 entrepreneurs as they turn ideas into businesses. The price tag: $3.5 Million for six months of exclusivity.

And, most ambitious, a live Lady Gaga concert in New York proposed for 2011, streamed on the web through YouTube and Vevo. Price tag to sponsor the one-off event?

Nine Million dollars for a sponsorship along with Samsung, including a presence on Lady Gaga’s YouTube channel and Facebook page.

Some of the series pitched by YouTube will never see the light of day, or a studio may opt to get their own sponsorship and proceed on their own. Some have already come to fruition: Howcast’s “Chief Household Officer,” pitched by YouTube as a 10-week series for $2.8 Million, is running on YouTube with a sponsorship deal from HP.

YouTube has been in the branded entertainment business for some time, but its involvement in selling the shows and working with Hollywood studios signal new ambition to win major marketing budgets. Indeed the price tags suggest YouTube is seeking higher ad rates than seen typically on TV.

Assuming YouTube can deliver a hefty 100 million views to a series for $3.5 Million in six months, that’s still a cost-per-thousand viewers of $35, higher than a typical TV ad rate of $20, and more in a league with Hulu, which sells TV spots on the web for $40.

YouTube can’t be faulted for a lack of ambition. Top YouTube execs like to say they’re creating the next generation of cable TV, built and scaled for the web. But instead of 500-odd channels on TV, YouTube is making a play for the “next 10,000,” appealing to all sorts of niches and interest groups.

While not unheard of, YouTube’s asking price is significantly higher than the typical budgets for web series. If YouTube can get its asking price, it will change the economics of online video and add another significant player in the market, along with Hulu, Netflix, and perhaps soon, Amazon.

“Every time you see a YouTube or Hulu or Netflix move into original content creation, it’s more opportunity for brands,” said one agency exec to Ad Age. “It’s a bigger playing field and more ways to reach an audience.”

A very interesting piece of work Advertising Age, thank you for sharing those insights with us.

Back to Google.

Should we give Google more hints for free here? I guess not. I do like many of the Google services, but I think the Greed is not good.

Google really respected the heart and soul of the Internet for many years. Google seems to be in last phase of its transformation from being a humble underdog, towards becoming an arrogant greedy monster?

I can at least understand why more people state: Google, turned from friend to frenemy. And might soon become the Web’s and consumers largest enemy.

Back to YouTube.
Are you sure that pursuing the TV budgets is the smartest strategic commercial idea available?

Are you sure you are on top of the latest digital meta trends? In some markets TV budgets are already lower than Online revenues…

I know it’s a very small market. Almost perceived as a Zoo. And that’s true in many ways. But the Netherlands – country of tulips, wooden shoes and windmills – might be a benchmark to your strategic team. If you have one.

The Netherlands has been the pilot market for music and bands for decades. If successful in that small Zoo, success will be guaranteed in other markets as well.

The Netherlands has also been the first country in the world with a very successful Social TV format called: The Voice of Holland. The format was created and produced by John de Mol’s Talpa. And broadcasted on RTL.

Soon Talpa sold its format to the BBC in the UK and to the USA. Most likely the UK and US broadcasters will leave out the so successful Social Interactions and Second Screen.

But the Netherlands seems to offer more very interesting benchmarks.

The advertising revenues in our small, crazy Zoo for example. Net TV spend in 2010 in the Netherlands was € 863 Million.

The Net Online spend (inc. search, display, video etc) in 2010 in the Netherlands was € 962 Million.

So Online topped TV with € 99 Million in 2010.

So depending on your own strategy and vision: do you see countries with borders or markets with opportunities? So let’s assume other markets might follow, would it be smart that structure would follow strategy?

Should YouTube be chasing TV budgets? Or focus at Online? Why do I get the feeling that your mediocre Chief Strategy Officers are stuck at tactical planning. Maybe the YouTube CSO team, should plan a trip to the Zoo called: the Netherlands?

And about the intrusive approach, Google you start to look like cowboys. Cowboys that are rushing for gold, chasing away the Indians.

Remember the Indian and the Dead Horse strategy?

Some insights from the old Indian story: When you notice you are riding a dead horse, get off!

However, in corporate life, we often seek another strategy, to deal with such a problem:

We look for a bigger whip
We change the rider
We tell that we have always ridden our horses this way
We establish a committee that will analyze dead horses
We travel to other places, to see how they ride dead horses
We create a task force that will study ways to get new life into dead horses
We hire outside experts who to profess to know how to ride dead horses
We develop a training program that teaches employees, how to ride dead horses better
We benchmark our dead horses to other dead horses
We send out RFPs to see if there are cheaper dead horses available
We establish a separate profit center for our division dead horses
Next we will spend a fortune on advertising, to promote dead horses

Well, I am aware that the Cowboys survived. And most Indians did not.

But I really hope that the land called ‘the Internet’ will keep some of its nature and heritage. So we can all keep living our lives in harmony, enjoying that same piece of land.

Source: IAB, eMarketer, Advertising Age