Speaking at the TV industry event Mipcom, YouTube Global Head of Content, Robert Kyncl declared that the advertising format the site employs is earning revenue at the same rate as US cable TV.
During his keynote speech Kyncl highlighted the advantages of optional ads outlining a win-win scenario for consumers and content providers; “We’re making ads optional. Users can skip them if they don’t like them. That’s a big deal. When advertisers pay only when ads are watched – and when viewers are watching only the ads that they care about – they won’t and they don’t mind paying. That means content creators are making more. Everybody wins. And it’s because of that; our system is starting to work.”
In a show of gratitude Kyncl thanked the high-profile advertisers that continue to embrace optional advertising by “increasing their spend year-over-year.”
YouTube’s stateside performance should come as no surprise to UK advertisers who have already seen online advertising expenditure surpass television since 2009. This is a trend that has continued to increase, with the Internet Advertising Bureau UK (IAB) releasing findings that predicts UK spending digital advertising can reach £5 billion.
As the Internet continues to find new ways to encroach into people’s everyday lives via the increased proliferation of web connected devices, digital advertising will continue to morph the de facto marketing avenue. The same IAB report estimates that around 60 per cent of people in the UK have a smartphone, with the average UK household holding a broadband speed of 9MB.
Internet Advertising Bureau director of Research & Strategy Tim Elkington said, "As digital technology and services evolve to make consumers' lives easier, more connected and more fun, it's no surprise that advertisers are coming to the digital party with bigger budgets, despite the challenging economic times elsewhere."
The ever evolving state of the Internet may also have a hand in the preference of optional advertisement. The continued fragmentation of media audiences based on an ever increasing choice of content that a site like YouTube provides, means that consumers have grown to be more impatient with brands that do not suit their interests. Gone are the days of broad appeal primetime advertising blocks; we live in an age where adverts are required to zero in on their ideal consumer much like a sniper would a target.
Kyncl would also announce the company’s intention to expand its original programming initiative into Europe, saying, “Last year we started to look at the consumer and advertiser metrics in the US. We liked the trajectory that we saw, so we decided to forward-invest our content in investments and catalyse a great new set of channels from existing as well as new partners coming to YouTube. That is gear three. This morning, we announced that the UK, France and Germany are going from gear two to gear three.”
YouTube will partner with a number of European content providers including; All3Media, Zodiak Media, Shine Group-owned ChannelFlip, Endemol, BBC Worldwide, ITN Productions, Euronews, UK-based content producer Gravity Road, and a video offshoot of dance music magazine Mixmag.