BY: DANIELLE SACKS @ fastcompany.com
Maximum cool: YouTube CEO Salar Kamangar (front) and his team: Margaret Stewart (user experience), Shishir Mehrotra (monetization), Hunter Walk (product), and Robert Kyncl (TV and film) | Photographs by Robyn Twomey
YouTube CEO Salar Kamangar and his team have transformed Google's Folly into a mind-blowing -- and lucrative -- global platform that is redefining the entertainment business.
YouTube says 94 of the top 100 brand advertisers have now run campaigns on the platform, and what's attracting them is the increasing body of research that shows that advertising on YouTube works. According to an effectiveness study by the U.K. firm Decipher Media Research, promoted videos -- video ads that appear prominently on YouTube's search-results page, competing with the content that users have searched for -- triple unaided brand awareness.
These results have yielded two insights -- that ads should be content and that any ad a user chooses is quite resonant -- and those have helped inform Mehrotra's latest initiative, which seeks to overhaul the way ads are consumed and sold on the site. TrueView, as it's known, gives viewers the option to skip an ad entirely -- but charges advertisers a premium if their content is chosen and watched the whole way through. (Another TrueView option, akin to part of Hulu's ad program, lets users choose one of a slate of ads to watch.) Nissan, Sony Pictures, and Ultimate Fighting Championship have been early adopters.
"We [the industry] want the new 30-second spot," says Publicis's Scheppach, who runs a group that's pioneering new ad models for emerging media. Based on her research, there's "300% to 400% improvement of advertising value if you pick the ad," she says.
Ultimately, Google sees this idea of "cost-per-view" advertising spreading even to its display-ad business (already driving $2.5 billion in annual revenue, of which YouTube has been called a significant but unspecified part). During Advertising Week in New York, where TrueView debuted, Google predicted that by 2015, 50% of display ads will include video, while 75% will have a social component. Most important, the company anticipates that these innovations could help make display advertising a $50 billion industry.
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