In the 1900s, a 41,000m2 airport located in the Bluff Creek, Los Angeles, housed some of the aircraft fleet of business tycoon, aviator and compulsive hand-washer Howard Hughes. But today, the planes are gone and in their stead stand YouTube’s top content creators, who now use this space as a production launchpad for their videos. And this transition seems fitting, given that one of the last century’s fastest growing industries has essentially passed the baton to what is shaping up to be one of today’s big players.
After building its first YouTube Space headquarters in 2012, Google followed this with similar studios in Tokyo, London and New York, and has in the process opened its doors to 60,000 creators from around the world, who have attended over 800 workshops, participated in over 2,500 collaborations and produced a mammoth 50 million hours of content.
Google provides these studios to content creators who have more than 10,000 subscribers free of charge and this, along with its revenue-sharing partner programme, forms an integral part of the investment allocated to supporting the talent active on YouTube.
Add to this above-the-line advertising campaigns, which have seen the cherubic faces of YouTube starlets Troye Sivan and Bethany Mota plastered over metro stations and bus shelters in Australia, and it’s evident that Google sees these ambassadors as key to the future of the platform.
“While there’s a big difference between time spent viewing, perhaps more important to advertisers is the type of viewing. Online viewing tends to be short-form, low engagement while TV is long-form high engagement. The critical element is effectiveness and that’s where long-form has the edge.” Kevin Kenrick.
This investment isn’t to ensure that content is created. As Google New Zealand’s managing director Tony Keusgen explains, there isn’t a lack of content on YouTube, with over 300 hours of video being uploaded to the platform every minute—and then monetised by Google. The problem, however, is that much of that content disappears into the sea of online overload and is watched only by the 10s of viewers who know the uploader. So Google’s investment and promotional efforts in this space have more to do with showing ad executives that the YouTube platform has quality in addition to scale.
Hesitant with the purse strings
A report released by ZenithOptimedia earlier this year predicted online advertising is likely to overtake television as the biggest contributor to the nation’s overall ad spend by 2016. And while the gravity of that milestone is difficult to dispute, Keusgen believes things are moving too slowly.
“The New Zealand agency and advertiser landscape is behind its comparative markets,” he says. “So when you look at the adoption of digital for example, in New Zealand just 21 percent of total ad spend is on digital, whereas it’s 31 percent in Australia and 36 percent in the UK. So, we know that New Zealand is really lagging behind in the adoption of digital to build brands and connect with consumers.”
Keusgen says it’s difficult to pinpoint the exact reasons as to why that’s the case, but he believes New Zealand is reaching a tipping point, which is being driven by increased willingness of Kiwi advertisers to use digital.
“Kiwi agencies and advertisers are adopting digital with much more rigour than they have in the past … [and there have been]a few examples where we’ve seen digital-led or digital-only campaigns,” he says.
And as brands relinquish the inertia that holds them to traditional channels to dip into digital, they shift their ad spend accordingly. So it comes as little surprise that broadcasters are starting to get defensive.
At the inaugural Ad:Tech event held in Auckland in November, TVNZ chief executive Kevin Kenrick pointed out that the time Kiwis spend watching TV continues to dwarf the time spent streaming videos on YouTube. Quoting Nielsen stats from September, Kenrick says that Kiwis spent an average of 190 minutes per day watching TV in comparison to the 19 minutes on the video-streaming service.
“While there’s a big difference between time spent viewing, perhaps more important to advertisers is the type of viewing,” he says. “Online viewing tends to be short-form, low engagement while TV is long-form high engagement. The critical element is effectiveness and that’s where long-form has the edge.”
MediaWorks group head of revenue Liz Fraser also champions the quality of the content available on traditional broadcast TV.
“Broadcasters do not have billions of impressions to trade,” she says, “but they do have the highest quality content, especially locally produced premium content.”
Where TVCs go to die?
YouTube often serves as a TVC dumping ground. And while this can extend the reach of a campaign, clients and agencies are starting to experiment—and the results have already been promising.
When things get meta
Colenso BBDO shot 64 different pre-rolls for Burger King and then linked these to content users were searching. Add to this the fact that the campaign called out pre-rolls for being annoying and you had a very meta campaign that relayed a message that resonated with the target market.
Colenso BBDO aimed to subvert the notion that shares don’t help in a campaign that used YouTube’s revenue sharing model to generate funds for the Pedigree adoption drive.
Honda blew minds with a dual narrative spot by Wieden + Kennedy called The Other Side, which allowed viewers to switch between two stories that were running concurrently.
Old Spice tapped into the star power of the ridiculously chiselled Isaiah Mustafa in a series of spots that had him answer fan questions sent in via social media in video form.
One of the major benefits of YouTube advertising is that it isn’t constrained by traditional TV timeslots. And this freedom has seen Air New Zealand, Johnnie Walker, Chanel No 5, Guinness and Chipotle all tell their brand stories through much longer spots.
The Facebook threat
Traditional TV players aren’t the only ones challenging Google for a cut of this ad spend. New media’s other juggernaut, Facebook, is also making a strong play at getting a piece of the time users spend watching videos with its autoplay feature.
Many brands and content marketers are uploading videos directly to their Facebook pages. In September alone, 800,000 small to medium sized businesses throughout the world posted three million videos to Facebook, more than double the figure recorded in 2013. And in a world where traffic equates to cash, keeping eyes on the newsfeed rather than sending them to YouTube is a goldmine.
But not everyone is convinced that Facebook is a threat to YouTube’s supremacy as the dominant player in the online video market. Speaking to US publication Digiday, George Hammer, DigitasLBi’s svp of content and social strategy, said that he foresees both platforms diverging, with Facebook providing superior targeting capabilities, while YouTube will continue offering cheaper cost-per-view options.
The YouTube riposte
By drawing attention to its YouTube stars, Google is emphasising the one point of difference that separates its video platform from both Facebook and traditional broadcasters. It’s a case of the company saying that it has content-creating superstars that not only produce engaging content, but also have hordes of fans that are engaged with what is being published.
In doing this, Google defends itself firstly against the allegation that YouTube viewers only want a quick fix while simultaneously enticing brands to associate their labels with young content-producers that have a direct link to the hard-to-reach millenial target market.
Across the ditch, Google recently launched Google Preferred, a system that allows agencies to purchase media space on the most popular media channels upfront in much the same way as television ad space has been purchased until now. And while this does allow advertisers access to premium ad space, it still doesn’t rectify the problem of how annoying pre-roll advertising often is—and this is something that OMD managing partner Andrew Reinholds would like to see addressed in the future.
“YouTube has reached such a point of both scale and influence that now requires agencies to think way beyond simply buying media time and space to more powerfully utilise the unique opportunities the platform offers advertisers,” says Reinholds. “It could be a very powerful channel, if agencies look to move beyond pre-rolls or banners … YouTube is a lean-in experience for most people, therefore specific strategies to fully leverage its unique environment will become more common.”
This is already materialising through platform-specific campaigns such as Burger King and Colenso BBDO’s anti pre-roll and Pedigree’s Sharity (see breakout box above), which asked people to share a video of cute dogs and raise money for them in the process, and also, more recently, through collaborations between YouTube stars and brands.
Locally, only Jamie Curry and Shannon Harris meet the one million-subscriber threshold to be defined as a YouTube star, and both have already worked with local and international brands on various projects.
“These content creators have huge audiences all over the world and brands can work with us to connect with them to create their own ongoing relationship in terms of how they’d like to continue working together,” says Keusgen. “Our role in that is simply facilitation and introduction. It’s up to the content creators to determine how they engage and with brands.”
Coca-Cola Australia recently commissioned Curry to work on the #colouryoursummer campaign by orchestrating an elaborate treasure hunt through Sydney and having her discover the different coloured Coke cans throughout the city. And what is most notable about this project is that there were no advertising or media agencies involved.
“It was all Jamie’s idea,” says Sarah Kelly, the public relations manager for the Australian arm of the drinks company. “We sat down in a room with Jamie and discussed different ideas. It was important for the message to be authentic within her channel.”
And this goes both ways, with Curry’s talent manager Anna Lawrence, an executive director at talent management agency Johnson & Laird, saying that she is very selective when it comes to choosing brands for the YouTube star to work with.
“[We only work with] brands that Jamie would legitimately engage with and will not damage her credibility,” says Lawrence. “Coca-Cola showed a huge amount of trust in Jamie throughout the process and allowed her a great deal of creative freedom … [and this]meant minimal edits were required for the video and Jamie’s authenticity was maintained.”
Taking control of pop culture
Of the 300 hours of video uploaded to YouTube every minute, only a very small proportion ever becomes viral. And in a 2011 TedTalk, YouTube trends manager Kevin Allocca said that, more so than in any other form of media, the success of videos on YouTube is determined by those watching. The audience determines whether something is shared, liked or spoken about, and this plays a major role in whether it goes on to appeal to millions (or even billions). “These are characteristics of a new kind of media in a new kind of culture where anyone has access and the audience defines the popularity,” said Allocca in the clip, which fittingly has been watched almost 400,000 times on YouTube. “No one has to green-light your idea, and we all now feel some ownership in our own pop culture.” And he adds: “These are not characteristics of old media. And they’re barely true of the media of today, but they will define the entertainment of the future.”
But this drive for authenticity also makes this type of promotional work a grey area. In the UK, for example, YouTube stars Dan Howell and Phil Lester were recently forced by the Advertising Standards Authority (ASA) to disclose that content produced in one of their clips was paid for by advertisers.
Hilary Souter, the chief executive of New Zealand’s ASA, says that if something is an advertisement then it should be obvious to the viewer that it is promotional. She points to the example of the #ad hashtag on Twitter, saying that measures such as these ensure transparency (although it has rarely been used). But she also adds that the necessity to adopt this approach on YouTube will be determined on a case-by-case basis. While the legal rules regarding the labelling of this type of YouTube advertising—or native advertising in general—are still unclear, one thing that is certain is that Curry’s promotional efforts are resonating with her audience of 1.2 million subscribers, with the video already tallying over 300,000 views since its launch on 9 November.
What is most significant about this result is that the vast majority of these views came from subscribers aged between 13 and 24 years old, the exact demographic that Coca-Cola set out to reach with the campaign. Where these subscribers are located is, however, a different question.
Location, location, location
Only 5.5 percent or roughly 69,000 of Curry’s subscribers are in New Zealand, with the remainder scattered across the world. And herein lies what is both a strength and weakness for YouTube.
For major multi-nationals like Coca-Cola and in the case of ‘for good’ campaigns like Sharity, the international scale of YouTube’s reach means that a promotional message delivered in one market might spill over and reach similar consumers located in other regions, thereby increasing the impact of the campaign.
The advantages of this were hyperbolically summarised by global general manager of Vice Media Hosi Simon at the Brandcast event when he took to stage and said: “Vice News has already been called the next CNN. But, with the scale that YouTube offers, we’re not going to be the next CNN; we’ll be 10x the next CNN.”
But many local brands aren’t immediately interested in reaching the broadest audience possible. And while the market place is becoming increasingly globalised, the primary goal of these companies remains selling product to those closest to them—and this means reaching as many of them as possible.
“YouTube has reached such a point of both scale and influence that now requires agencies to think way beyond simply buying media time and space to more powerfully utilise the unique opportunities the platform offers advertisers. It could be a very powerful channel, if agencies look to move beyond pre-rolls or banners … YouTube is a lean-in experience for most people, therefore specific strategies to fully leverage its unique environment will become more common.” Andrew Reinholds.
Keusgen argues that the diverse range of options available on YouTube means that brands should be able to find channel owners or content creators that meet specific requirements.
“There are four million channels on YouTube,” he says, “and some of these content creators are really broad and conversational and others are very targeted around very specific topics à la beauty and fashion. I think there are both the broad brush component and then those with huge followings in very niche interests.”
This being said, there are currently no Kiwi YouTube channels that offer the consistently high reach delivered daily by the linear TV broadcasters. Somewhat ironically, the very things that make linear TV antiquated—that it is largely geo-locked and that viewers can’t choose—are also the things that continue to make it appealing to advertisers.
For now, and in the foreseeable future, digital-first and digital-only remain an exception to the general trend. And although digital’s growth cannot be denied, it will still be quite some time until brands, media owners and advertisers drop the safety net of TV entirely.
This article originally appeared in the January/February edition of NZ Marketing.