After striking an exclusive video content deal with YouTube back in 2014, now WPP's GroupM agency is now said to be putting the brakes on its use of the Google-owned platform, according to The Australian
In September last year Google marked 10 years of YouTube at its second annual Brandcast event held in Sydney. It gave an update on Google Preferred – the top 5% of YouTube inventory over which it formed an exclusive deal with GroupM – which expires this year.
At the time the deal was first struck, GroupM said it reflects a shift in the way the agency network views online video. Danny Bass, GroupM chief investment officer at the time, told AdNews the move was about changing the way GroupM has viewed viewed YouTube in the past, which was as a digital channel receiving digital budgets – adding that now it would come from mainstream budgets.
However, after the return on a major investment did not live up to expectations, GroupM is not renewing an upfront advertising deal with YouTube on anywhere near the same terms - “dealing a blow to the Google-owned online video platform’s aspirations to position itself as a marketing alternative to traditional television”.
The budget shift could now see GroupM push more cash into TV ad sales.
The paper also claims the media buying arm has briefed rival media companies to propose alternatives to YouTube.
Last year, Google Australia MD at the time, Maile Carnegie, claimed YouTube reaches more 18-54 year old Australians than any individual TV station and talked up the numbers behind YouTube's growth over the last year. It focused particularly on ‘watchtime’, which it says is 60% up year on year. It increased 28% in the 12 months prior to that. However, when asked by AdNews how long that watchtime was, industry lead Bart Jenniches would not disclose how much time is spent watching, only saying that across the board globally, people watch “hundreds and millions of hours”.
Speaking to AdNews, a GroupM spokesperson said it does not comment on speculation as its deals are commercially sensitive and confidential.
Update: Speaking to AdNews, a spokesperson from Google says a select number of agencies can access the Google Preferred content for their clients, including GroupM. It added that Google Preferred sold out for 2016 and many clients are seeing the benefits of advertising in the top 5% of content on YouTube.
“Overall, it doesn't really matter how much time someone watches TV - it matters whether they watch your ad, how much of that ad they watch, and whether it’s reaching the audience you're targeting,” the spokesperson says.
“The critical thing for advertisers hoping to reach consumers is whether they have content that encourages people to watch and engage with the ads on that platform.”
Google added that it's excited to work with Australian brands to reach consumers in new ways on YouTube, as part of their media mix.
“We believe that when determining the right media mix, marketers should follow their audience,” the spokesperson says.
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