YouTube Is Pursuing Upfront Ad Deals for its Pay-TV Service

YouTube is pitching its pay-TV service to advertisers with the aim of getting them to spend money they ordinarily allocate to traditional and, increasingly, streaming TV platforms. Marketers, however, still think of YouTube as a mobile (and desktop) video platform with a lot of lower-quality user-generated content rather than a TV service such as Hulu. YouTube and YouTube TV garner 100 million U.S. viewers each month, with watch time up 80 percent year-over-year in March.

The Wall Street Journal reports that the company is pitching its TV inventory, not “as an improvement on mobile and desktop ads, but as an additional option for advertisers.”

But, at Ingka Group, the largest IKEA franchisee and operator, integrated media manager Gianluca Toccafondi said that, “their soul is social media with user-generated video online,” adding that such videos give the marketer “less control and less visibility into where their ads appear.” “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,” he said.

According to eMarketer, “advertisers spent more than $6.5 billion in the U.S. on advertising that appeared on Internet-connected TV screens in 2019.”

YouTube would like marketers to ink upfront deals, whereby they would “commit to ad buys further ahead than they typically would for digital video, for its apps running on smart TVs and streaming-TV devices.”

On May 19, the company “announced an ad-buying category for marketers seeking to reach its users on streaming TV screens,” with “videos by personalities on the platform,” YouTube programing and “traditional TV shows and movies available through YouTube’s main app or its pay-TV service.” The content, available in the U.S. only, is “part of the platform’s YouTube Select program, which reserves ad inventory across categories of top-performing YouTube channels.”

“More and more marketers are having a dedicated line item in their media plans for streaming,” said YouTube vice president of global solutions Debbie Weinstein. “We want to make sure they are considering YouTube as well.”

At Visible, a Verizon-owned prepaid phone carrier, chief marketing office Minjae Ormes said that, “YouTube has been more of a platform to be able to reach mobile consumers … to the degree connected TV viewership is happening on YouTube as an extension of that, it’s useful.” Toccafondi would like to “see more from YouTube on the particular value of its TV inventory and its brand-safety and quality standards.”

Digital ad agency ForwardPMX did an analysis of 10 clients’ ad spending and found that, “TV screens accounted for 28 percent of their spending on YouTube from January to May of this year, up from 13 percent a year earlier.” Company senior vice president of digital strategy Jessie Mamey noted that, “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.”