YouTube’s Chase for Streaming-TV Ad Dollars Faces Hurdles

June 1, 2020

Read the full story here  in the Wall Street Journal.

YouTube wants advertisers to spend more to reach the consumers who are increasingly using their television to watch videos on its platform.

The effort is a bid for a piece of the massive ad budgets that go toward traditional TV as well as the fast-growing ad spending earmarked for streaming TV.

But YouTube’s idea isn’t an easy sale, advertisers say.

Many marketers still treat YouTube as a mobile and desktop video-viewing platform—and not a streaming TV service in the vein of Walt Disney Co. ’s Hulu or ViacomCBS Inc.’s Pluto TV—because that is how most people still watch it. Advertisers also want greater confidence the content on YouTube is safe for their brands and equal to the quality of TV.

“Their soul is social media with user-generated video online,” said Gianluca Toccafondi, integrated media manager for Ingka Group, the largest IKEA franchisee and operator. Such video is important, but offers marketers less control and less visibility into where their ads appear, he said.

“Becoming a TV platform requires a lot of field work in curating the content and really defining the audiences you’re curating this content for,” Mr. Toccafondi added.

TV screens are a small—but in some cases growing—piece of advertisers’ YouTube purchases. A senior executive at one ad-agency holding company said TV screens account for 10% of YouTube ads it buys through the platform’s auction, unchanged from last year.

An analysis of 10 clients’ ad spending by digital ad agency ForwardPMX, part of Stagwell Group LLC, found that TV screens accounted for 28% of their spending on YouTube from January to May of this year, up from 13% a year earlier.

Delivery on TV screens is included by default on YouTube ad buys, but in most cases, ForwardPMX will turn off that option and do separate TV-specific buys, said Jessie Mamey, senior vice president of digital strategy at ForwardPMX. TVs are better suited for raising brand awareness, for example, than for generating actions like clicking through to an advertiser’s website, she said.

“On connected TVs, your intent is to lean back, versus already being leaned-in on mobile,” she said.

Read more in WSJ. 

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