Why Digital Advertisers Will Closely Watch YouTube in 2016

October 22, 2015

Working in the digital advertising space can feel suffocating these days. It seems that every website, search engine and consumer is out to get you and your product’s advertisement off their content. Over the past few years, ad blocking technology has become increasingly popular amongst the average Internet users. So much so that Apple decided to add ad blocking software to their latest mobile release--marking the first time the tech giant has provided this offering.

In short, this crusade for an ad free Internet and mobile experience has led many digital advertisers to one final haven: video content. You see, video content is the most popular content on the Internet today. Consumers get video content from blogs, Subscription-based Video on Demand services (SVOD), Video on Demand (VOD) and most of all, free video hosting services such as YouTube.

via Rose Carson / Shutterstock.com

That’s why, when YouTube--a Google company--announced it would be entering the SVOD space with it’s newest YouTube Red offering, it was a big moment for many digital advertisers.

Here’s what we know so far about YouTube Red:

The premium YouTube experience will cost $9.99/month, making it equal to or on par with other SVOD offerings such as Netflix.YouTube Red’s greatest feature is that it is an ad free experience. Those who sign up for the service get other perks as well such as: 

  • Being able to play YouTube video’s in the background on mobile (a first for the mobile app, and a grip many have had with the service in the past)
  • A free subscription to Google Play Music--Google’s counter to both iTunes and Spotify
  • Users will also have access to original programming, although it has yet to be seen what this original programming is

Up until yesterday, YouTube was a top location for digital advertisers to place their pre-roll ads--or video advertisements which run prior to the playing of an online video. For a short while, YouTube had to fight ad blocking software, which would allow users to skip over their video content, but Google was able to remedy this problem by disabling ad blocking software while YouTube runs on their Chrome web browser.

Marketers will have no choice, then, but to keep an eye on YouTube Red and root for its failure. The fact of the matter remains that the SVOD space is already quite saturated. Users have their pickings of Netflix, Amazon Video, Hulu and Apple TV which all offer similar or identical content as YouTube Red does or would. Furthermore, it’s difficult to predict whether YouTube Red will have much success making conversions from these established SVOD brands.

The one scary offering is that Google is packaging their premium YouTube Red offering with their Google Play Music offering, which continues to grow in size, function and popularity. The Google Play Music offering already comes at a $9.99/month subscription, so those who were on the fence about leaving Spotify might finally do so, now that they can also get YouTube Red bundled in.

If YouTube Red is a success, it could forever change the landscape of digital advertising. Marketers would be wise to keep an eye on the new service, and begin to plan their next steps today.

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