Last week, YouTube announced a new, nifty analytics feature that captures how many minutes your audience watched of your content. For example, in the past 30 days, one company’s viewers (yes, mine) watched 15 million minutes of content; that’s 29 years of content! But who’s counting? (Apparently, YouTube). Going all the way back to 2007, those viewers have watched 400 million minutes — or a whopping 760-plus years worth.
It’s incredible, but more importantly, it’s scary. Let me explain.
It’s widely known that a 30-minute television show actually only has 22 minutes of content; the remaining 8 minutes are filled with ads. So the ratio is almost 3-1. I know I’m comparing apples with oranges, but if in theory over time CPMs for television and web audiences will converge, then to ensure that advertisers get the same value, and for the online video ecosystem to be sustainable, then it’s interesting to see if producers can garner the same ratio of ads to their content. The Internet continues to grow in size, but the growth rates are definitely slowing down, judging by the latest IAB numbers.
In any case, YouTube is very global: assume 50% of the audience is outside of the U.S. In our case, that leaves 7.5 million minutes of content consumed over the past 30 days. Maintaining the same 3-1 ratio, that means we would have needed 2.5 million minutes of ads to maintain the same economics as TV.
Problem? According to comScore, YouTube generated 142 million ads in aggregate during the month of August. I can tell you that we didn’t generate 2.5 million minutes of ads on our YouTube channel, but to illustrate my point, we would have had to generate 1.7% of YouTube’s ads (2.5 divided by 142) to have the same economics as TV.
What are the chances that we ever account for 1.7% of YouTube’s daily ads? Not likely.
How many minutes of ads did we likely account for? YouTube is known to generate over 2 billion impressions per day globally, assume it generates 1 billion in the US; we account for 0.01% of those, at best. So if the economics ought to be at 1.7% but are in fact at 0.01%, then YouTube is orders of magnitude away from where it needs to be, so to speak.
Ironically, while people have written about the death of the 30-second spot, I think ‘tis the pre-roll that is going to die. Hold on — that doesn’t mean the pre-roll will go away, but the pre-roll will become the display ad of its era.
As much as branded content hasn’t delivered the goods, this weekend something happened that made me realize branded content stands a chance to emerge as a viable form of advertising, after all, even though in the past I’ve questioned its long term viability for a myriad of reasons.
When Red Bull sponsors the Austrian skydiver Felix Baumgartner – a bloke whom 99% of folks haven’t heard of – to freefall from space, you know that marketing and entertainment is changing. That is obviously a unique, crazy-expensive, wildly entertaining and rather risky experiment, but what Red Bull effectively did is “create its own inventory” out of thin air, price the metrics itself, and do away with either the 30-second TV spot or the pre-roll.
I’m not telling every producer or marketer to emulate Red Bull – Red Bull is obviously a very unique brand. But the underlying lesson is that content is king, the experience is the deal-breaker and frankly, most of us are thinking about “online video marketing” in very antiquated terms. Unless we realize that the inefficient pre-roll/CPM model is flawed, if not fatally broken, then the real opportunities provided by the Internet will pass us up as fast as a crazy flying Austrian falling from the skies.