Will brands spend Rs 2 crore+ for a YouTube Masthead?

As marketing budgets groan under the weight of the economic slowdown, the revised rate card for YouTube’s Masthead is raising eyebrows, however, some experts believe that the price tag is worth it

e4m by Shikha Paliwal
Updated: Jan 15, 2020 10:09 AM

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YouTube

The YouTube Masthead is one of the most coveted real estates for digital advertisers; which is why it now comes in the range of a whopping Rs 2 crore – Rs 2.8 crore per day price tag. In January last year, the masthead cost was revised to Rs 1.4 crore per day from a previous rate of Rs 72 lakhs. This mind-boggling 3x price jump in the past two years has had several agencies wondering whether to ask clients about parking spends on such an expensive property. However, most others believe the Masthead cannot be ignored purely for the massive impact it brings to their ad spends.

It is also important to note, that the Masthead ads, which were only available at a Cost Per Day (CPD) basis earlier, now come with a buying option of Cost Per Thousand (CPM) basis. Advertisers can now customise who sees the ad as per their target audience. The flexibility that CPM buying brings, therefore, is an advantage for brands that don’t have deep enough pockets to afford it on a CPD basis.

But can this price hike really justify its cost to brands, especially given the current economic climate under which marketing budgets have been feeling the heat? The view is divided on this one. While a section believes that the over Rs 2 crore rate card does not make for sound spends, the other view is that no other platform can deliver the kind of audience YouTube does and hence justifies the price.

Also Read: The YouTube story: A decade in revolutionising marketing & advertising

According to a senior executive at a digital media agency: “These Mastheads used to be in the range of Rs 55- 75 lakhs, now they’ve gone up to over Rs 2 crores. Because it gives you immediate visibility, it is a hot property. But with the rates going up, at an overall level, brands are reconsidering whether they should be spending so much money on these. YouTube has always sold the Masthead at a very high rate; however, there are times when the requirement goes up. For example, during brand launches, you want immediate awareness. At the current rate, the chances are that the demand might go down because, obviously, the price becomes a barrier.”

Says another media planner: “With increased rates, the Masthead is not as attractive anymore, and not many brands can afford this price.”

But the YouTube Masthead has some strong backers too, opines a digital agency executive: “The Masthead delivers massive audiences, which is why the price is high. Obviously, at the price, not many brands can take it because the outlay is high. But for the brands that can afford it, it will create a massive impact. You can reach a 100 million people in a day which no other platform can give. It works well for a big launch or a big announcement and there is no better platform than this. The new pricing will make it attractive to only a few brands with deep pockets and those looking to making an impact. While the number of people buying it may be less, there are also different products for different price points.”

Experts agree that for smaller advertisers, these rates are almost half-a-year's digital advertising budgets and only the big spenders from FMCG, OEMs, telecom and e-commerce platforms can afford to invest in it at the present rates. But they reiterate that now advertisers have the option of either taking the ad spot on a per-day basis or on impressions thus making the YouTube Masthead available to all brands.

YouTube has over 250 million monthly active users in India, its ability to deliver to a wide audience sees the Masthead being booked months in advance. Experts argue that the reach and ROI that the platform brings cannot be matched especially when brands are looking to launch new products.

Explaining its effectiveness a digital agency head shares: “At the price of Rs 1.4 crore last year, the masthead was delivering 6.5-7 cr uniques and 700-800 million impressions in January 2019. By Jan 2020, the unique consumers reached over 10  crores and they are serving above 1.3 bn impressions. So, in a year it has almost doubled. As the internet expands, this audience will also expand by the end of this year. But my rate card with the latest prices will remain the same for the year. So if we average it out, at a 15 crore unique, it is better than any other medium.”

The YouTube Masthead delivers the numbers, shares Gopa Kumar, Chief Operating Officer, Isobar India adding that no other property can command a reach of a billion impressions on a single day. He says, “So if you are looking at a big-ticket launch or reaching out to those numbers it is the best real estate available. It is as effective as a mainstream newspapers front page ad and that is the charm of it. The Masthead delivers it at a lower cost. From an overall cost-benefit analysis and if you go deeper into the numbers that they deliver, the CPM calculation is very low. It all depends on the appetite of the advertiser. If they have money, they will still go for it, maybe not the same level they were at a year or two years back, but I still see good demand for CPD as well. Now that they have given the opportunity for CPM buys, advertisers have options.”

Agrees Shradha Agarwal, co-Founder and COO, Grapes Digital: “YouTube Masthead, despite reaching such a high cost, is still effective because the cost per reach has not doubled from last year. It still gives you a high reach with the ever-increasing internet base. As compared to the print where you get the same with static creatives, Youtube Masthead reaches out to 10Crs + Unique visitors through video ads. And, to be honest, the budget is not being cannibalised from Digital spends but from TV or Print. So good for Digital Agencies.”

On their part,  YouTube is positive about successfully collaborating with brands in the year ahead.  Explaining why it still remains a preferred destination for advertisers,  Aditya Swami, Director, Agency Partnerships & Create With Google, says, "YouTube is an amazing success story in India. It’s a powerful place for advertisers to anchor their brand and direct response campaigns and reach the audiences they want to find. Over the last few years, we have evolved our platform to make YouTube a full-funnel solution that not only delivers unparalleled reach but drive business results for a wide variety of advertisers through innovative ad formats. We are excited about the opportunity to partner with brands in 2020 and help them achieve their goals with path-breaking work."

According to the Dentsu Aegis Network-exchange4media Digital Report 2019, digital advertising is expected to grow with a CAGR of 31.96 per cent to reach Rs 24,920 crore by 2021. 

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