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Online video advertising overtakes TV for driving brand sales. But what of the future?
One of the biggest debates in advertising of our times is over where brands should spend the bulk of their money – on TV or YouTube?
For Matt Brittin, president, EMEA at Google, one thing is clear – advertising on YouTube, which is owned by Google – is better for driving sales than TV advertising.
Speaking at the session “The (Entertainment) Revolution Will Not be Televised,” on the ITV Stage, he told the audience, “YouTube’s return on investment is higher than TV in terms of driving sales.” This was the finding of numerous studies carried out by YouTube in conjunction with leading econometrics agencies, he said, though he added that TV also performs strongly. “This is an “and” game, not an “or” game,” he said.
Brands need to spend their budgets both online and through TV, but they need to take account of the revolution that is happening in video consumption. People are watching video on a variety of devices, where once they had to sit in the living room “in front of a large scale device that was extremely expensive and watch what was on. Now my teenage kids don’t know what ‘on’ means,” stated Brittin.
He added that there has been a change in the way we think about premium content. It is no longer the most expensive content to produce, “but actually, premium content is what you want to watch where you want to watch it. Personal is the new premium.”
Brittin was in conversation with Nigel Morris, the chief executive for America and EMEA of Dentsu Aegis Network.
Morris said his agency’s research shows that the return on investment for advertising around online video is 50% higher than for television ads. But he added, “Today we see really fluid behaviour across all media. TV versus online video is the wrong argument; it is sight sound and motion coming together that has always been the most powerful entertainment form and most powerful brand building form.”
However, he argued that the media industry is lagging behind the fluid behaviour of audiences and is struggling to keep up with the changes in their viewing habits. He revealed more findings from his agency’s research.
“We worked out if you planned the online video first and the TV after you actually increased the media performance of that, but what you also did but in terms of informing the creative process, you got a different mindset, you started to break out of that tyranny of the 30-sec ad.”
By 2019, Cisco predicts that up to 90% of internet traffic will be video. This will transform entertainment culture and change the way brands interact with audiences.
Tracey Follows, chief strategy and innovation officer at research agency The Future Laboratory, has been commissioned by Google to envisage the trends that will shape the future of entertainment and media over coming years.
She gave the session a flavour of some of the research findings. There will be a split between niche and mass content with “an explosion of mass entertainment and also niche communities with a hunger for micro-specific content, which will co-exist.”
She predicted that curators, editors and critics as gatekeepers will make a comeback, using algorithms to help people find a way through the mass of online content as a “kind of matchmaking force.”
She forecast that there would be a “push back against oversharing” and people would limit what they share in social media to their immediate friends and families.
The idea of second or third screening will disappear as people will become “screen agnostic.” There will be a movement towards immersive entertainment delivered through virtual reality and augmented reality and a return to “Transmedia.”
Follows also foresaw a world of “virtual living rooms where communal viewing is reborn through virtual reality, with collaborative storytelling together in virtual spaces.”
In this rapidly changing environment, brands will need to transform their approaches to audiences in order to connect and engage with consumers.
