The proliferation of multichannel networks (MCNs) on YouTube over the past 24 months has led media observers to suggest that the online video giant's emerging ecosystem is reminiscent of the cable TV industry in the 1980s.
There are striking similarities. What started as a chaotic, individualistic, social sharing platform has morphed under Google's hand into a premium "network of networks," spawning programming brands such as Maker Studios, Fullscreen and AwesomenessTV, which aim to become the MTVs, CNNs and ESPNs of this generation.
“We are the paradigm, we believe, of what media companies will look like in the future,” says Ynon Kreiz, CEO of Maker Studios. Says George Strompolos, CEO and founder of Fullscreen: “We want to be the next Viacom, the next Disney, the next NBCUniversal. We feel like we’re on that path. We’re laying the foundation for what we believe will be a massively valuable and massively profitable media company.”
[From Hollywood's Big-Money YouTube Hit Factory, BloombergBusinessweek Technology, August 28, 2014]
Indeed, the YouTube MCNs are attracting investment and assistance from visionaries of the old paradigm who see massive opportunity in the rapid unfolding of the new. However, as happened in the shift from the broadcast network paradigm to the cable network paradigm, advertising has lagged somewhat behind the audience.
Advertisers follow the audience
In the '80s, Cable TV's "narrowcast" programming eventually attracted brand advertisers looking for more targeted and cost-effective ways to reach their customers. Today, YouTube is attracting brands that are enthralled by its precision audience and location targeting as well as the wealth of information gleaned from its video ad campaigns.
For example, advertisers appreciate its cost per view pricing model in which they not only pay just for full views of their ads, but also learn how many people watched a portion of their ads before skipping them. Campaign insights, along with the multiplier effect that video ads have on brand name searches and all elements of the marketing mix, are proving to be the added-value stuff brand advertiser's dreams are made of.
Of course, it helps that it is the world's largest video content platform. Its users comprise not just millennials; viewership is skyrocketing across all demographics and interest groups.
Every month, 1 billion people around the planet go to YouTube, where they collectively consume some 6 billion hours of video. Every minute, 100 more hours of programming are added to the platform.With summer TV ratings falling, the domestic movie box office down sharply, and upfront sales of TV advertising surprisingly weak, a slew of mergers, acquisitions, and investment has shaken the YouTube cosmos. Big media companies, which a few years ago were furiously filing copyright lawsuits against YouTube, are jostling for a piece of the action.
At a macro level, it’s about these companies moving aggressively to reimagine how they connect with digital, mobile, and social audiences.
[From Hollywood's Big-Money YouTube Hit Factory, BloombergBusinessweek Technology, August 28, 2014]
As the MCNs multiply, attracting accelerated viewership and investments, the opportunities are ripe for savvy advertisers to adopt the new ecosystem early and often. Which is why large brands like Nationwide Insurance, Wendy's and Pella Windows, as well as smaller names, are leveraging a video advertising platform like Sightly's TargetView™ to personalize their ads and deliver them at scale to micro-targeted audiences in thousands of pinpoint locations across multiple screens (not just TV) through YouTube.
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