Posted by James McDavid on March 12, 2014
The recent appointment of Susan Wojcicki as YouTube's next CEO signals the importance Google is placing on online video as a means for driving ad revenues. Yet it’s also a tacit recognition that YouTube’s current ad models aren’t satisfying the needs of two of its core user groups:
- The content creators who rely on ad revenue to fund their efforts
- The marketers who bring those dollars to the table
Over the past few years, we’ve seen online video advertising grow into a multibillion-dollar industry — and it will only continue to grow. In fact, Forrester forecasts spending on video advertising in the US to hit $4.6 billion this year. While this spending coincides with the explosion of consumers watching video content online, for too long, marketers and publishers have thought of online video as a continuation of their TV strategies, using online channels as another place to share TV ads.
YouTube plays a central role in the online video ecosystem: It’s the ideal platform for marketers to experiment with and use to find new opportunities to reach target audiences viewing content online. In fact, while younger consumers are most likely to visit the site monthly, with 83% of 18-24 year olds reporting this behavior, 58% of US consumers ages 40-44 also frequent YouTube on a monthly basis, as do 45% of 55-59 year olds. As a result, marketers can reach consumers of all ages by incorporating YouTube into their marketing mix.
The good news is, many marketers are already recognizing the role that YouTube can play in building their brand, with the following stats worth noting:
- Nearly 50% of marketers are already using YouTube in their marketing efforts,
- An additional 23% plan to initiate some usage of YouTube in the next year.
- 39% of those already using the platform are using it to build brand awareness among consumers,
- 28% are using it to build brand preference, using either branded content or in-stream ads.
For Wojcicki, the more complex challenge comes when solving for the content creators. Finding new monetization models that bring consistent revenues to the networks springing up on YouTube is essential to the health of the platform. But even media companies are struggling to answer this question — so it will be a major challenge for a technology and advertising company to come up with the solution.
To learn more about how brands can make better use of YouTube in their marketing, be sure to sign up for my Webinar on March 25. Or join me in London at Forrester's Forum For Marketing Leaders (May 13-14), where I'll be discussing how marketers can harness the power of video across the customer life cycle.
If you’ve got any suggestions about how YouTube could solve this challenge, let me know in the comments, or tweet @james_mcdavid.
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