Publicis’ Big Ad Deal With YouTube Is Broadcast TV’s Worst Nightmare

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In news that should send a shiver down the spines of television  executives everywhere, the gargantuan ad agency holding company Publicis  Groupe has reached a deal with Google to purchase tens of millions  of dollars in YouTube advertising over the next year.


The Financial Times’ Emily Steel reports the deal will be managed by Publicis  Groupe’s MediaVest unit, which helps high-profile clients like Coca-Cola and  Walmart plan and assess their media budgets.

The news comes just six months after MediaVest made a big video advertising  deal with Twitter, one of Google’s rivals in the war to scoop up the advertising dollars that are  currently being spent on television.

Here’s why folks with money in traditional television networks should  worry:

According to data from Nielsen, Americans are still consuming more than 30 times as much traditional television as desktop  and smartphone online video. But while YouTube consumption jumped 50%  over the past year, from 4 billion of hours of video consumed each month to 6  billion hours, traditional TV viewership has dropped by either 0.1% or 0.2% each of the past three  quarters.

And that’s the problem for television: its audience numbers have reached a plateau, but its competitors — Facebook, Twitter, and YouTube — are all growing … and they’re all coming for TV’s ad money.

Until recently, much of YouTube’s advertising inventory was of the so-called  “long-tail” variety, meaning niche content that appealed to small fragments  of the general YouTube user base. This past March, in fact, an executive with  MediaVest’s sister company Starcom told All Things D that Google’s ad salespeople were trying to get customers to buy ad packages targeted at broad audiences instead of selling premium ads the way television always has — on specific shows and networks.

As a result, Starcom Media USA digital head Mark Pavia said at the time that Google had “tried a model that just  wouldn’t work for advertisers.”

Now, it appears Google has found a way to appeal to one of the big spenders  of premium ad dollars by allowing it to make the same kind of purchases it would  on television, only instead of buying space on ESPN’s SportsCenter, MediaVest  could buy space on an online sports network like SB Nation’s YouTube  channel.

The large size of the deal is also a huge positive indicator for Google’s  video advertising business, given that as recently as March, advertisers were  deterred from making big online buys because video ad loads were only 10% to 20% of what they are on  television. The deal can be seen as a vote of confidence in both the size of  YouTube’s inventory and publishers like Machinima that are trying  to bring TV quality to YouTube networks.

At least until now, television has been able to hold onto advertising dollars  throughout the digital revolution, replenishing ad dollars it lost to display and online video  advertising with money it has taken from dying print entities. In fact,  television accounted for more than 62% of advertising dollars spent by  major media buyers in 2012.

It’s not time to put television on life support just yet, but today’s news  shows how that day might be coming much sooner than television executives would  like it to.

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There is 1 comment for this article
  1. Joe Sandy at 20:50

    Incredible! I had an idea that this was coming. Youtube has grown massively since it was taken up by Google and the alternative to TV advertising is now alive and well. Watch out television execs!! Google’s watching.

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