Agencies Consider YouTube Value For Content, Ad Revs

Irwin-GotliebThe wave of original channels YouTube is trying to establish may provide an ad platform that can work in conjunction with TV, partly because the on-demand content can buttress a linear feed and vice versa.

“Complementary tools in our tool box” is how GroupM CEO Irwin Gotlieb described the YouTube opportunity.

Still, Gotlieb raised concerns that buffering and lack of HD video could decrease the effectiveness of YouTube (and other digital video) ads.

“We’re not foolish enough to think an impression is an impression is an impression,” he said.

Gotlieb did suggest the YouTube model could be as transformative as cable networks when they mounted a challenge to broadcasters, though there is a significant difference. YouTube offers content owners an opportunity to produce without a gauntlet of gatekeepers -- and that could be a trouble spot for advertisers. 

Much of the content could lack the “balance that the traditional model does.” He was referring to content producers and advertisers going through a sort of tug of war that leads to shows that allow both to profit. 

In his experience, “there’s always been a healthy tension,” Gotlieb said at the NATPE event.

More broadly, he said the question is how YouTube will monetize its effort. The on-demand model lowers the bar for success. “The quantity of people you need on YouTube to be successful is smaller than even niche cable,” he said.

YouTube has a large pool to draw from with 4 billion views a day, said Alex Carloss, who oversees original programming at the company.  “The regional distribution of content through cable prevented those global diasporas from being discovered,” he said, joining Gotlieb on a panel.

There is a question of how users will find the new channels, but Carloss said a recent redesign of the site is aimed at providing easier discovery.

Regarding using the platform for marketing, Anheuser-Busch In Bev digital executive Erin Matts said, “There’s a bit of a false expectation that you just put a brand on YouTube and you get a million hits.” Still, failure to garner loads of viewers can be valuable. A-B can test creative at a low cost and help avoid using unappealing content on the more expensive TV side.

As far as the reach versus frequency debate that percolates in advertising and should grow as digital video does, Gotlieb said he’s learned over the past two decades that while frequency is beneficial, it is not necessarily preferential.

“From a pure return-on-investment standpoint,” he said, “you’re better off lowering your frequency and increasing your unduplicated reach.”

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