How YouTube Cashes In On Other Companies' Advertising

The fix, as they say, is in. As with so many other aspects of the economy, getting a jump on competitors is increasingly crucial to advertising success, especially when it comes to big events.

Holiday shopping, the Super Bowl, the Olympics, World Cup Soccer, coronations, funerals, investments, whatever: if it can be anticipated, then planners can create promotions designed to better assure a robust return on the investment and an impact on consumer preferences.

Well before Black Friday, Cyber Monday and the various global sporting events of interest, YouTube and other outlets serve as an echo chamber or, perhaps more accurately, a figurative projection booth from which audience interest can be stoked. And this effort requires a budget, which is welcome news to YouTube and other ancillary platforms or channels through which buzz can be built.

Just as algorithmic or high speed trading front runs investment moves, so this sort of anticipatory advertising drives consumer interest and activity. The interpretation and application of big data to predictive strategy is already a significant part of the institutional environment. The refinement focus now is simply in improving its accuracy. JL

Kyle Stock reports in BusinessWeek:

YouTube has welcomed a windfall from companies trying to build buzz for the lavish commercials they will air during the big game.

The Denver Broncos might be favored to take the trophy on Sunday, but Google (GOOG) has already been winning the Super Bowl for weeks.

The tech giant’s YouTube platform has welcomed a windfall from companies trying to build buzz for the lavish commercials they will air during the big game. Some 17 corporations have already posted “teaser ads” on YouTube, according to Google, and while they’re free to post, these companies are paying for promotion spots on mastheads, through search results, and in front of other YouTube videos. Yes, the Super Bowl has now given us ads for ads for ads, if you will.
For example, a Google search for “Super Bowl commercial” this morning brought up paid links to YouTube videos from Audi (NSU:GR), Bud Light (BUD), and Volkswagen (VOW:GR).

The Super Bowl ad contest, it turns out, is increasingly similar to a presidential campaign—it’s all about the crucial weeks of expensive and calculated preparation leading up to the big day. Last year viewers watched 265 million Super Bowl commercials on YouTube, about 2.6 times more than in 2012, according to Google. What’s more, almost one-third of those video clicks came before kickoff. “The scoreboard of the Super Bowl has become YouTube views,” Lucas Watson, Google’s vice president of global brand solutions, said at a breakfast in Manhattan last week.
Ironically, as Super Bowl airtime becomes more expensive, it has become critical for companies to spend heavily to prime viewers. The risk of getting drowned out by dozens of other advertisers—or being skipped over by channel changers—is too great not to hedge against. (The “players” in this year’s Puppy Bowl look formidably adorable).
A 30-second Super Bowl ad now costs an estimated $4 million. Jaguar (TTM) shelled out for 60 seconds of big-game airtime, plus another $5 million to alert audiences via Google and other outlets to keep an eye out for the spots, according to the Wall Street Journal. The carmaker’s YouTube teaser, featuring actor Ben Kingsley, was posted Jan. 15 and had garnered almost 14,000 views by this morning.

Google certainly isn’t the only company cashing in on the extra-long advertising warm-up. Every social-media platform is getting a piece of the action, as are old-school advertising forums. In addition to its YouTube blitz, Jaguar paid New York’s mass-transit authority to wrap city subway trains in ads touting its Super Bowl spot.
YouTube is quickly becoming a cornerstone of digital media strategy even beyond the Super Bowl. Last year it welcomed almost $6 billion in advertising revenue, an increase of more than 50 percent over 2012, according to estimates by eMarketer. With an ad haul of $66.5 billion, traditional television isn’t that far ahead.
Google, meanwhile, expects the Super Bowl ad blitz to come earlier next year. “It will become sort of like shopping season,” Watson said. “The day after Christmas, it will be game on.”