YouTube Leaves TV in the Dust with Strong NewFronts Display
In front of a room-full of potential advertisers at the Digital NewFronts, Google Executive Chairman Eric Schmidt declared "the future is now" for YouTube, which recently passed 1 billion unique visitors monthly. While many would have expected Schmidt to purport that YouTube's content is as good as what's on TV, he made a simple and very clear statement instead: YouTube content is better than TV.
The event, billed as a "brandcast,” featured celebrities including Snoop Dogg, Macklemore and YouTube personality Felicia Day, but the real star was the platform itself. Schmidt said YouTube is “not a replacement for something that we know," according to Business Insider. “It's a new thing that we have to think about, to program, to curate and build new platforms."
"I thought that YouTube was like TV, but it isn't. I was wrong," added Robert Kyncl, YouTube's global head of content. "TV is one-way. YouTube talks back. TV means reach. YouTube means engagement."
Unlike Yahoo and AOL, who used NewFronts to announce new original programming slates, YouTube made no programming announcements but did disclose a partnership with the Association of National Advertisers' Alliance for Family Entertainment to create more digital family content.
"History—from the transition to radio, then TV, from network to cable—tells us that advertisers always follow the audience," wrote Kyncl in a blog post following the event, adding, that Procter & Gamble, Kellogg and Wal-Mart, all part of the National Advertiser’s Alliance would buy ads alongside "family friendly" videos on YouTube.
YouTube also celebrated DreamWorks Animation's recent purchase of their teen-focused Awesomeness TV for $33 million. "This is a whole new form of content, content delivery and content consumption," said DreamWorks CEO Jeffery Katzenberg in BI. "It's the medium of the future and the future has already arrived. Video is becoming the global shared experience."
With more than 1 billion unique monthly visitors watching more than 6 billion hours of video on YouTube every month, “that's equal to nearly 684,000 years of viewing—or—an hour a month for every human on Earth," according to CNET. YouTube attributes a large part of its success to engagement with "Generation C"—those who grew up wired. "If you want to win with that under 40 generation, you've got to be on YouTube," said Margo Georgiadis, president of the Americas for YouTube in CNET.
"We find ourselves in the middle of an incredible momentum," added Kyncl, “and we believe the momentum will continue. Why? There's an insatiable appetite for online video, and that appetite is our opportunity."
Digital video ad spend in the US will reach $4.14 billion this year, up from $2.93 billion last year, according to eMarketer, still pale in comparison to TV ad spend, which is expected to reach $66.35 billion in 2013, up from $64.54 billion in 2012, but the tide continues to change. "Advertisers are looking for an alternative to broadcast television, but there's not a way to make a giant bet on online video right now because for a lot of advertisers, the medium is still unproven," Michael J. Wolf, who runs Activate, a strategy consulting firm for media companies toldThe Wall Street Journal.
While other networks like Yahoo, AOL and Hulu are relying on new celebrity relationships, YouTube's pitch stood alone as it touted its home-grown video as a destiny of sorts to drooling ad execs. “While lots of people would like YouTube to approach sales the way old-media buyers like to approach sales, that’s not very Googley,” notes All Things D. “The pitch might alter again next year, but I’d surprised if YouTube made a fundamental switch in the way it sells its eyeballs.”