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March 2015

Viewing posts from March , 2015

The Future of Brand Marketing is Here and It’s Name is YouTube

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Brand marketing has rapidly evolved from a high-minded exercise in logo design, positioning and broadcast messaging into a nuanced and flexible strategy for winning the hearts and minds of consumers. It's now more about having a conversation than using a megaphone. While YouTube is not the only place great brand marketing is happening, they're working hard to set the standard.

 

The YouTube Advertisers channel is slowly but surely building great content to support the marketers who know their success hinges on deep engagement, rather than "spray and pray" advertising. The changes we're seeing are led by PR people who already understand that earned media isn't scripted, and who already collaborate on content creation, rather than "owning" the process, like their counterparts in the creative department or ad agency are used to doing.

 

As part of the YouTube Insights Hangout on Air series, "a quarterly insights jam for brand marketers," Tara Walpert Levy, Managing Director at Google, talks with four marketing industry leaders about lessons learned from YouTube in the last year, and resolutions for 2015. Here's what they had to say.

 

What were some of the key online video learnings of the past year?

According to Allison Stern, Co-Founder of Tubular Labs, "brands are really starting to embrace YouTube as a platform, and brands embracing the kinds of content people want to consume on YouTube, and having a lot of really amazing partnerships with YouTube creators...

 

Rob Gorman, Chief Digital Officer, Global of GroupM stated,  "Perhaps

 and people like us. There is less looking up and more looking across and feeling like they're joining in." (A trend we discussed in depth here.)

 

Dramatically lower cost of production, change of mindset and faster  speed are often overlooked as a key insights going forward, said Joshua Spanier, Global Media Director at Google. He added,

 

 said Evan Ellman, Global Video Strategist, Anheuser-Busch InBev.

 

Sounds like it's time to get your brand on YouTube, start collaborating and seeing your reach and engagement soar. For more on these thought leaders' resolutions for 2015, watch the recap below or catch the full 47 min Hangout here.

 

 

What did you learn about brand marketing on YouTube in the last year? What's your YouTube strategy for 2015? Curious to hear your thoughts or questions in the comments!

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Zen and the Art of Creating Simple Products

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Creating a new product and figuring out how to market it share some of the same challenges-- namely, how to focus on a niche and zero in on solving the pains of a very specific group of people.

 

Yes, I know the world needs what you're creating. Sure, millions would benefit. Your vision is world-changing. I totally get it. The largest barrier to entry, however, isn't about making something that solves more problems than your competitors. That approach slows everything down, and leads to huge, expensive failures. No, the largest barrier to entry is thinking you have to solve more than one problem in the first place.

 

The folks who built the Strider bike in the image above didn't make some complicated new thing. They made the simplest product possible by focusing on doing less, removing features, and satisfying fewer people to make their target consumers really happy. They make tiny bikes with no pedals. So simple, but so useful. Is it any surprise that they've sold over a million bikes?

 

Focus on Less; Get More Done

Marketers and entrepreneurs share a kind of optimism that makes them different than most. They see possibility in everything. They want to tackle the largest problems. Unfortunately, the realities of running a business, product design, messaging, and getting something usable in the hands of your target consumers all require focus. There is always a first step.

 

Content BLVD, for example, began with the notion that most advertising makes for horrible user experiences. The majority of content we consume on TV, in print and online is funded by brands trying to get their messages communicated to us, yet we'd prefer to ignore them. Most ads interrupt whatever we're trying to watch, listen to, or read and that's terribly annoying. We have more control than ever over where to direct our attention and when, so we ignore online banner ads and DVR our way past TV commercials.

 

Our vision is to create advertising that actually delights people. We want to help brands get their messages inside the content their target consumers already enjoy, not matter the medium.

 

Big vision, right? How do you communicate that in a single website headline that converts users? How do you target use cases so you know what features to code first? How do you find the early adopters who need your help today? The answer is focus.

 

Because we're building a marketplace, we knew that it would only work if two types of users could get together to initiate deals that would work for them. A marketplace of opportunities with no matches is not useful to anyone.

 

So, to launch Content BLVD, we homed in not just on digital content, but YouTube, specifically. And within YouTube, we began by focusing on creators in the beauty space who could use products to help them make great content for their audiences. At the same time, we focused on reaching out to PR agencies who represent beauty brands-- firms that already want to find influencers to share their products with a highly targeted audience. Finally, because there are many ways to integrate products into content, we focused solely on free product giveaways, a popular option in the beauty space.

 

Within a just a few days, we had creators finding products they wanted to feature, and PR agencies who were happy to ship them their products. It could not have gone smoother. Had we tried to launch outside of this niche market, we'd have struggled mightily. Instead, we have traction and users who are eagerly coming back to get as many deals as they can.

 

Remove Features; Differentiate More

Matching advertisers and content creators can have a lot of moving parts. The manual outreach process that defines the status quo for most brands and agencies is very complicated and time-consuming. At the same time, platforms that are currently attempting to solve these problems are also complicated.

 

We could have listened to what user said they need and built a product that does a lot of what they already do, only a little bit better. We aren't after "a little bit better" though. In conceptualizing the simplest possible product, we started asking ourselves what's really needed. The harder we questioned our assumptions, the more we uncovered made up needs.

 

As it turns out, to scale up highly targeted and engaging product placements, YouTube creators just need a place to click on products they want to feature, and advertisers just need to see who clicked, and whether they want to approve them. Done.

 

We do hear feedback about more potential features users would like, and we do have many new features in the product road map. However, we have yet to have a single user say the interface is not usable. The overwhelming response is that the simplicity and speed we're creating is truly delightful.

 

Going forward, we are committed to releasing features only if they continue to improve the user experience and therefore create a more effective ecosystem for product placements. Isolated user requests do not a priority make.

 

Satisfy Fewer People; Satisfy Them Better

One of the key insights we gained during extensive interviews with potential users on the PR and advertising side is that media buyers are itching to spend more on brand integrations like product placements. They would gladly share-shift a portion of TV spend over to YouTube, for example, if they could do it efficiently.  PR agencies, however, don't care about spend, because they don't like buying audience exposure-- they just want high quality impressions with the right target audience.

 

To satisfy media buyers, we'd have to build a lot before it could help them better than their current alternatives. PR agencies, however, can use our first iteration. For the time being, we aren't thinking about media buyers at all. Trying to satisfy both user types would have delayed release and watered down our offering to the point that we may have helped some media buyers and some PR agencies, but we could not help both of them and do it well.

 

As explained above, we also focused on beauty products, which means our first niche market is only a subset of PR agencies. That's not a problem. That's not thinking small. It's strategic niche marketing. It's how you gain clarity and make the hard choices that move your product forward faster.

 

It should be noted that none of these ideas are really ours. We're die hard students of the philosophies taught in The Lean Startup, by Eric Ries, Blue Ocean Strategy, by Chan Kim and Renee Mouborgne, and many others-- we read a lot. Reading isn't where learning happens, though. Not until we were deep into the doing of it, were we able to take their lessons to heart, and apply them rigorously.

 

In the beginning, committing to focus, fewer features and a smaller user base can feel like you're turning down opportunities. The truth is, every potential opportunity is just a distraction from the biggest single opportunity you and your company are best-suited to explore.

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Are Multi-Channel Networks Built to Last?

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YouTube's ascent as a dominant media channel is nothing short of mind-boggling. Where there are eyeballs, dollars will follow, of course, and boy does YouTube have the eyeballs. It's created a new gold rush. And with it, a rush to take advantage of the miners.

 

Anyone with a passing interest in digital media knows all about Disney's acquisition of the MCN, Maker Studios, in early 2014 for half a billion in cash and as much as $450 million in performance-based earn outs. If evaluated on the basis of revenue, the deal is madness. But Maker boasts a massive audience reach through the YouTube channels it represents-- some 5.5 billion monthly views and 380 million subscribers.

 

So it seems it's the eyeballs that drive that valuation, and Disney must be betting it can turn them into a lot more revenue. If that's true, will the consumer experience improve, making the whole project sustainable? And will the YouTube talent under contract stay put?

 

Traditional media companies seem to think they can grab a large chunk of YouTube value and somehow skim it off for themselves. There's no doubt the space is white hot. However it shakes out, we think they're all fighting a losing battle-- applying industrial-age strategy to a new media model that needs more flexibility to last.

 

Total Media Fragmentation

When anyone with a computer and a web cam can establish his or her own media property and publish to it without restriction at extremely low cost, the media landscape does more than fragment. It shatters into a billion pieces. That's not hyperbole; YouTube now claims over one billion users each watching their own self-selected sampling of videos.

 

Over 300 hours of video are uploaded to YouTube every minute. Hundreds of millions of hours are watched daily, up 50% year-over-year. Half of views are on mobile devices, across 75 countries and 61 languages. YouTube is everywhere. And as we discussed in a previous article, YouTube creators enjoy more influence among American teens than mainstream celebrities.

 

On the one hand, YouTube's ubiquity makes it a powerful media channel when viewed as a whole. On the other hand, it's the messy conglomeration of millions of mostly unknown creators who made it so. The gold rush wasn't a single "thing," and neither is the ecosystem that's built on top of YouTube. Like the would-be miners who headed into the hills without much skill and few resources, but loads of gumption, YouTubers are out doing their own thing, prospecting for views.

 

A little gold fleck here, a tiny nugget there, finding an audience as a YouTuber is hard work. Your potential viewers can just as easily find your channel as they can a million others.  Who's going to point you in the right direction? Who's going to look out for you?

 

Filling a Void

In the absence of other options, multi-channel networks offer strength in numbers, resources, advice, analytics and social support. They put structure around tiny media businesses that otherwise had none, with the promise of greater prosperity for all involved.

 

On its face, that's not a bad idea-- many YouTubers have benefitted greatly from the help of their MCNs. Miners need shovels, boots and headlamps, after all. They find safety in numbers and efficiencies in sharing knowledge and effort. The assumption with MCNs, of course, is not just that they can help YouTubers go find the audience that's scattered across the mountain, but that they can actually build the sluice channels and drive audience to them.

 

Helping YouTube talent to produce more and better content, while also driving audience and business deals is a labor-intensive process. It takes a lot of people to do that work. Because MCNs are also high growth businesses trying to bundle up as much YouTube talent as possible, they tend to run at a deficit, in anticipation of future rewards, so they need to protect their investments.

 

Putting Up Walls

Most MCNs lock their creators into contracts that stake a claim to a specified portion of ad revenue. In exchange for access to their resources, multi-channel networks usually take about 15-20% of gross advertising revenue for their member channels, regardless whether they helped to generate that revenue. That's after YouTube takes their 45% share, leaving less than half of gross revenue for the creators themselves.

 

There are two problems with this contractual revenue share. First, MCNs must work to continually improve their offerings for creators to justify the revenue they give up, something they can't do for thousands of their member channels which are just too small to warrant attention.

 

Second, YouTube's share comes off the top of all Adsense revenue, so in order to keep more profits, MCNs have to look beyond Google-served ads to sponsorships and product placements that don't flow through Google's purse. The trouble is, these kinds of deals are hard to scale, making them more expensive to pursue.

 

Wanting in on a piece of the digital video action, old media companies, like Disney, are hoping to apply their production and monetization expertise to this incredibly fast-moving industry. A recent report by Strategy&, however, underscores the difficulty of that prospect:

 

MCNs' success with advertisers and large media companies remains to be proven, as does the long term viability of their business model. Traditional media companies looking to play in this area will need to make the right strategic choices... going forward. There will be challenges-- most notably in the effort to grow revenues and expand margins...

 

While large media companies seek to gain protected assets, they could end up quashing their value by slowing down their evolution and further burdening already-stressed business models. The real issue here is that YouTube became such a force in the first place precisely because it put up no walls. Now, for some reason, MCNs and the media companies courting them think walls are the solution to extracting the value they want.

 

Perhaps Disney sees a lot of potential in the private video site, Maker.TV. At an Alexa rank of over 50,000 (it's the 50,000th most-visited site on the web), it's unclear how it will ever grow into the upper echelon of sites without investing heavily in promotion. Why do they think walling off the content in a location outside YouTube will help?

 

Think about it this way: There's a hugely popular public farmer's market in town. Anyone can come and set up a booth. Then a big grocery store chain swoops in, buys the rights to the most popular booths and moves them to another location down the street, where only the people they choose set up a business can offer their goods. What do you think happens to the public market? It keeps growing anyway. What happens to the businesses down the block? Does that fancy little curated market somehow grow, or do people continue to stop at the public market first to see what's fun and new today, eventually deciding they don't need to make that second trip down the street?

 

Tearing The Walls Back Down

Jeff Jarvis, in his highly influential book, What Would Google Do?, provides a number of key prescriptions for new business models in this age of Google. None of them involve more middlemen or protected assets, like big companies of the 20th century (and old media models).

 

YouTube works (and Google bought it), because it's open, free and dynamically created by millions of people. It's fast, engaging and unfiltered. Is Disney any of those things? Are any traditional media companies?

 

To survive and thrive in the decades ahead, companies can't expect to turn the new media model back into an old one. They can't put layers of management and production value between YouTube creators and their audience. They can't wall them off and own them like they do their sound stages.

 

Big media companies are ignoring the fact that while they want to focus on helping the most popular creators become even more so, the majority of videos on YouTube average just 2300 to 9800 views each.  Of course, those numbers are skewed upward, too, with very few videos capturing tens of thousands to millions of views, while many times more videos receive only hundreds or fewer. Are they built to handle this incredibly diverse "mass of niches" that powers YouTube's popularity? No. That's why they ignore it and try to bet only on the winners.

 

Content BLVD's model is doing what none of the traditional media companies can figure out: helping thousands of businesses and thousands of creators work together quickly and efficiently, without a permanent tithe to YouTube, and without needing an expensive management staff.

 

 

As we discussed this fall, that's why we're building a marketplace-- not an agency, network, or ad platform. To win in digital video, you don't need more consolidation. You need more distribution.

 

Companies that succeed with digital video in the future won't do so by ignoring the success of mass creation, or by layering expensive resources on top of it. They'll win by embracing it-- by learning how both to deliver and extract value from small audiences across millions of videos. Multi-channel networks that go against this concept by design, are not built to last.

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