A YouTube Marketing Primer with Pixability

Both video consumption and advertising on YouTube are on an impressive trajectory.

Pixability is an ad buying and video marketing platform for YouTube. Many of the world’s top brands and agencies depend on Pixability’s award-winning programmatic media technology for effective YouTube campaigns with complete transparency and reporting accuracy. Pixability enables media professionals to plan smarter placements, run faster campaigns, and see better results.

Bettina Hein founded Pixability, her second startup, in 2008. Pixability has raised north of $10M. Its most recent round was led by Point Judith Capital, who also backed Nest.

Pixability employs about 45 people and is hiring, with headquarters in Boston and offices in New York, San Francisco, Chicago, and London.

Q.   Bettina, what is the total spend in online video advertising globally and in the U.S. and what percentage of that goes to YouTube?

A.   Online video advertising in the U.S. is estimated at $10B by Jefferies. Though Google doesn’t break out YouTube’s financials, analysts such as Jefferies have estimated YouTube’s gross revenues at $5.9B for 2014. The difference between gross and net revenues for YouTube – in contrast to platforms like Facebook – is that YouTube shares its advertising revenues with video creators. On average, YouTube keeps around 55% of the ad revenues it collects and pays out 45% to creators. eMarketer estimated YouTube’s net US video ad revenue at $1.13 billion in 2014, accounting for 18.9% of the US digital video ad market.

Q.   Pixability was one of the first companies in the world to become YouTube certified. What does that mean and what is involved?

A.   YouTube certification is a rigorous training program that teaches best practices across several specific subject areas including YouTube Platform and Channel Strategy, Content Strategy, Audience Development, MCN Best Practices, Monetization, and Rights Management. All of our employees are required to complete YouTube certification to help team members get up to speed on the YouTube ecosystem.

YouTube Channels

Q.   Brands can maintain proprietary YouTube channels, run ads across YouTube, or both. How do you decide on the right mix, the right approach? Does it vary by industry?

A.   We recommend that all brands establish and maintain their own YouTube channel. The right mix of activity on YouTube depends on each brand’s business goals. For example, are you focused more on awareness or conversions? Are you optimizing for maximum reach, brand lift, click-throughs, email sign-ups or average order values? What is your ideal target customer in terms of interests, age and geography? This determines the right mix of ad types and campaign executions. Pixability’s programmatic ad technology allows you to pick the variables that are important to your brand.

Q.   If you are a brand, which department should own your YouTube channel? Is it Marketing? Is it PR? Any tips for organizing for YouTube effectiveness?

A.   The marketing department – specifically the teams focused on digital – should own YouTube, set relevant KPIs, and measure campaigns against those business metrics. Most large brands work with their digital agency and their media agency on their YouTube strategy. It’s important to understand that a successful YouTube strategy has to contain both organic efforts (creating videos that people choose to watch and search for) and paid efforts (ads that drive audiences to a brand’s organic efforts or their website).

Q.   What are the right metrics to focus on if you are managing a YouTube channel? What are the right measures of engagement?

A.   The ultimate metric for any marketing plan is: Am I selling more? On YouTube, you start with getting the right views by targeting the right audience. For a beauty brand that means being found and placing ads alongside makeup tutorials. If you are seen by the right viewers, you can then measure click-through-rates, web traffic to your conversion pages, and ultimately sales generated from those views. Other metrics to focus on include audience retention, and increased engagement through earned views, likes, shares, and subscribers.

Q.   What are the most common mistakes companies make with their YouTube channels?

A.   Repurposing 15 or 30-second TV commercials is a big mistake on YouTube. Content made specifically for the YouTube audience is typically much more successful. YouTube can impact every stage of the traditional marketing funnel – awareness for a product, consideration of a product, followed by a purchase. It’s most effective in the second phase, when customers are in the process of researching a purchase. We’ve found that many brands are surprised by what their target audience is actually watching, or by the length of content that their target audience engages with most. Often brands think YouTube videos have to be short (under three minutes), but our data shows that in many verticals consumers seek long-form content like tutorials on YouTube.

Q.   A while back, a helpful board member at a startup I was working with suggested that we create a viral video because the cost would be low and the impact high. Why isn’t it that easy?

A.   You can’t predict whether a video will “go viral,” so you shouldn’t plan your marketing strategy around a viral video. That’s the same approach as planning your retirement around a lottery win. Even if you happen to create a viral hit, data shows no correlation between viral videos and sales.

Q.   Folks may not know that the second largest search engine on earth is YouTube. How does SEO differ on YouTube?

A.   As it is the second largest search engine, SEO on YouTube is hugely important. It involves optimizing video titles and descriptions to include relevant keywords, calls-to-action and tags. Search rankings in YouTube are not only influenced by keywords and metadata but also by watch time and the overall performance of the YouTube channel.

Q.   With 300+ hours of content being uploaded to YouTube every minute, is it hard for brand-owned channels to get noticed?

A.   Yes. We recently analyzed the beauty industry on YouTube and found that brands only had three percent share of voice. The overwhelming majority of brand mentions on YouTube come from brand ‘fans’ or independent creators. This presents a radical shift from the traditional media model where a brand could almost completely control its message. Brands now have to use a blend of strategies to get noticed: influence creators, create their own content, and use advertising to connect with audiences. With the right strategy in place, there is significant opportunity for brand-owned channels to engage audiences amidst high-quality YouTube videos.

YouTube Advertising

Q.   Are brands moving their advertising dollars from TV to YouTube?

A.   Brands will allocate ad dollars wherever they are seeing the greatest measurable return on investment. Over the past few years we have seen some very powerful returns on YouTube. Large agencies like Omnicom are recommending that their clients shift 10% to 25% of their TV spend to online video. Ad dollars are shifting from TV to online video faster than the industry predicted, and YouTube is leading the charge.

Q.   Will video increasingly be bought through “upfronts” like TV?

A.   Yes, premium video content is already being sold through the online version of upfronts, called the digital newfronts, which take place every year in April in New York City. Google has an entire sales team devoted to securing upfront commitments from brands on YouTube.

Q.   What does the rise of the multi-channel networks (MCNs) mean for advertisers?

A.   MCNs bundle a large number of YouTube channels and represent these channels vis-a-vis YouTube and advertisers. They are often focused around a vertical and/or demographic. As an advertiser you can book ads via an MCN if their vertical or demographic aligns closely with your target audience. We recommend, though, that advertisers buy programmatically and analyze which independent creators align with their brand.

Q.   Is there enough high-quality inventory on YouTube to meet the rapidly rising demand from advertisers?

A.   There is plenty of high-quality inventory on YouTube. YouTube is an amazing place to advertise because even beyond Google Preferred, there is an abundance of content that resonates with viewers, delivers amazing ad performance, and is brand safe. Both the quality and volume of content on YouTube continues to rise so we’ve never had an issue identifying and targeting great inventory.

Q.   What is Google Preferred?

A.   Google Preferred was created in April 2014. It gives marketers access to the top one or top five percent of the most popular content across several categories, including food, entertainment, news, comedy, music, and gaming,

Q.   What percentage of YouTube ads are delivered to mobile devices?

A.   Currently 50 percent of YouTube videos are being consumed on mobile devices. We’re finding that the most effective mobile ads are in the video format and targeted at brand awareness. People are currently more likely to click on a video ad on desktop compared to mobile, but that may shift over time.

Q.   What are the right metrics to use when planning and then evaluating an ad buy on YouTube?

A.   The most important metric is the brand’s business objective. That could be around awareness or performance. We focus on the customers’ KPIs and we use our software to map YouTube campaigns to those KPIs. Traditional TV KPIs don’t necessarily translate well to the digital world because digital advertisers receive much more detailed advertising data.

Q.   How do CPMs on YouTube compare to elsewhere?

A.   In YouTube’s auction-based Adwords for Video system, advertisers pay per view, not per impression. A view only counts if more than 30 seconds has been watched – if the viewer skips the ad before 30 seconds, the advertiser pays nothing. This is very attractive for advertisers but also makes it difficult to compare the cost on YouTube to traditional CPMs. We see that brands on average get about eight impressions for every paid view. So here’s the math: multiply your paid views by eight, then multiply by 1000 to get your effective CPM. That makes for an approximate comparison. We actually recommend going much deeper than just comparing CPMs though. You should really measure actions obtained from those views and impressions. If millions of people watch your ad but take no action, your marketing has failed, no matter how cheaply you acquired those views.

Q.   How do brands prevent their YouTube ads from playing against cat videos (or worse)?

A.   What’s wrong with cat videos? If you are Purina, that’s exactly where you want to advertise. The great advantage of YouTube is that it is a fairly well-policed platform with very few problems like fraud or bot traffic. If you pair this advantage with the sophisticated targeting that YouTube enables, you can make sure that your YouTube ad is served to the right person at the right time. YouTube TrueView ads are an extremely powerful tool when demographic and interest targeting is put to the test. Compared to TV advertising, marketers on YouTube have insight into the exact viewers – interest profiles, channel visitors, engaged users, previous buyers; the specific content they’re interested in – by topic, keyword, search query; and the circumstances they’re watching under – zip code, DMA, language, and device.

Q.   What are the most common mistakes companies make with YouTube advertising?

A.   A lack of understanding of YouTube as a platform frequently leads to poor targeting and inefficient ad buys. Many marketers don’t know exactly where their ads are running, who is watching, how much ads cost, and how they’re performing. They often let their agencies buy in a suboptimal way. One big mistake is to launch a YouTube campaign with one video and then just let it run without modification. A best practice – enabled by Pixability’s software – is to run dozens, if not hundreds, of simultaneous sub-campaigns and then optimize by adding budget to those that perform best while pausing those that underperform.

Q.   What about video inventory that exists across the rest of the web?  Should advertisers also look to Hulu and NBCi, where video completion rates seem to be high, or to Dailymotion or Vimeo?

A.   It’s important to know that in terms of size of audience, YouTube dwarfs other video sites. According to comScore, YouTube attracts 84.8% of total desktop viewers. We could also recommend trying Hulu, but the other platforms – in our view – are currently still too small to matter. Ultimately it all comes back to audience. If a brand discovers its audience is on another site, it makes perfect sense to advertise there.

Q.   How does video advertising work in conjunction with search, display, and offline?

A.   YouTube campaigns should be integrated into a brand’s comprehensive marketing and advertising campaign. Messaging should be aligned, but content should be tailored to each platform and the medium in which it’s being consumed. On YouTube you can buy pre-roll, search, and display ad formats within the same Adwords for Video system, so you can take advantage of synchronized efforts across all ad formats.

Q.   Do you recommend behavioral targeting and video remarketing?

A.   Absolutely. YouTube gives marketers the unique opportunity to shape the entire marketing funnel in a very targeted way, reaching consumers at various stages. You can target based on audience, content, demographic, then evaluate each sub-audience separately and serve them different ads or different offers, see where people start to react, and then run another layer of remarketing to push them down the funnel.

Q.   The IAB says you have a video impression if 50% of the player containing it can be seen for at least two seconds. Not a high bar. What can marketers do to protect themselves from paying for video ads that don’t actually get seen?

A.   YouTube TrueView rates are set against a much higher bar, and that’s what we set our benchmarks to. With TrueView ads, consumers control which ads they want to see and interact with. The advertiser only pays when a viewer chooses not to skip an ad and watches more than 30 seconds of the ad. If you are advertising outside of YouTube, you must employ technology that tells you how many of your impressions were actually viewable, and have agreements with your providers to set benchmarks so you don’t pay for a view that is under that benchmark.

Programmatic

Q.   Roughly 20% of display ads are placed via programmatic buying today. What percentage of YouTube buying is currently accomplished programmatically?

A.   YouTube does not disclose how much buying is programmatic, but we estimate that it’s a larger share than for display.

Q.   Why is programmatic buying right for YouTube? How does programmatic buying result in better YouTube campaign performance? Can you quantify performance improvement?

A.   It’s not just about programmatic, it’s about targeting and benchmarks. A programmatic approach allows for granular and sophisticated targeting on YouTube, ensuring relevant and timely ads are served to the right audiences across the entire YouTube ecosystem. If you employ programmatic optimization platforms like Pixability’s, you can achieve significant improvements. Pixability campaigns have achieved up to 10x higher click-through rates, 600 percent lift in organic traffic, 40 percent lower cost per view, and 50 percent reduction in customer acquisition cost.

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