YouTube - the hottest new destination for advertising

Brands are launching campaigns on YouTube first due to its sheer reach & impact on consumers. While there are other options such as movie streaming apps, YouTube still rules the roost for video ads, say experts

e4m by Sonam Gulati
Updated: Feb 19, 2014 8:25 AM
YouTube - the hottest new destination for advertising

You Tube is now the second largest search engine. Often consumers directly go to YouTube looking for various ‘how to’ videos. It is befitting then that YouTube has also become the answer and the medium to address the question of wider reach.

The unparallel reach that the platform has can be gauged from examples such as Google’s ‘Reunion’ ad campaign, which got five million views on YouTube in one day without any marketing. There are several instances where content has gone viral on the video platform in a short span of time, testifying its power as a mass communication platform. In fact, brands have started launching their campaigns first on YouTube and then in mainline media.

Why do brands love YouTube?
Though consumers, given an option, almost always skip an ad, brands still bet high on YouTube. Aman Malhotra, Digital Marketing Head, Samsung said that the electronics major has made YouTube a part of its TV media plan. On what drives brands to YouTube, Malhotra stated that the platform offers unduplicated reach and helps in building frequency.

On the other hand, Pratik Gupta, Co-Founder & Director - New Business Innovations, FoxyMoron noted that a big reason why YouTube is drawing more and more marketers is that it is much cheaper than television. “TV is a lot more expensive than it used to be, so brands that tend to have a medium-sized budget are opting for digital. Also, on television there is a lot of wastage of advertisement since the audience can’t be targeted properly. Digital has targeted reach,” he added.

Is the ROI greater?
Experts believe it is. While Malhotra said that for a targeted reach, YouTube does offer greater ROI and impact, Gupta added that since the audience can be defined, the ROI becomes greater. “From location to age-groups to content preference – all kinds of parameters regarding the viewer can be defined beforehand and thus, the impact is much higher,” Gupta said.

From a consumer’s point of view, ads are irritants; but thanks to a new breed of creative minds, interesting concepts are coming up. As long as the ads are crisp and interesting, they are bound to get noticed. Though the possibility of viewer skipping the ad at the first opportunity is still high, but if the content is correctly targeted, it is often viewed.

What clicks with the brands?
You Tube offers a lot of options for advertisers. There are the skippable ads that appear pre-, mid- or post-roll while viewing the content. The skippable ads can be skipped after the first five seconds. There are also non-skippable ads that the viewer can’t skip. The latter has been picking up for some time, though a Google official shared that there is a healthy mix between skippable and non-skippable ads.

While commenting on the implications of such ads, Kanika Mathur, MD, Razorfish said, “Viewers must watch these non-skippable ads before they are able to watch the selected video. This may create dissonance with the viewers, who may turn away from the video. Normally, these ads are sold on a CPM basis and may generate higher CPMs than other ad formats on YouTube. However, while non-skippable ads may generate higher revenue than other ad formats, they also have a higher abandonment rate. Enabling this ad format across videos can lead to lower video views and watch time.”

There are regular display ads and standard in-stream ads that play before, during or after a viewer initiated a YouTube video, these are also not skippable.

Gupta, on the other hand, said that all forms of ads are gaining popularity on YouTube and it all depends on how deep the advertiser’s pockets are.

Industry insiders also feel that going forth video will be a key driver in digital advertising. “Video consumption will drive digital advertising, with more investment in buying and creating content for the medium. This will also include a lot of traditional players taking digital far more seriously. Video is going to be the single most determining factor this year in the digital medium,” said Atul Hegde, CEO, Ignitee Digital. Though there are other options such as movie streaming apps and Facebook sponsored stories, YouTube still rules the roost for video ads and content. Though all categories are experimenting with video ads, the Consumer Packaged Goods (CPG) category seems to be taking the bigger strides.


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