It’s January 2016. You know what that means: A month-long series of stories about brands that will spend from $4.6 million to $5 million for a 30-second spot that will air during Super Bowl 50. Why? Because last year’s Big Game was the most watched TV broadcast of all time in the U.S. That’s why.
Okay. So, let’s do the math. Last year, it cost around $4.5 million for a 30-second spot, or about $9.0 million for a 60-second commercial during the Super Bowl. And, the average audience reached during the Big Game was 114.4 million viewers. So, the average cost per view (CPV) of an ad that was 30 seconds long was about $0.04 last year. And, if the ad were 60 seconds long, like “Clash of Clans: Revenge (Official Super Bowl TV Commercial),” then the average CPV was approximately $0.08.
Of course, this assumes that TV viewers watch all the commercials during breaks in the Super Bowl, instead of heading to the kitchen to grab another can of Budweiser and some more Doritos. (Maybe, this explains why Anheuser-Busch InBev generally launches one of its new Budweiser ads ONLINE, and PepsiCo’s Frito-Lay typically concludes its annual “Crash the Super Bowl” contest to get viewers to select their favorite consumer-generated Doritos ad ONLINE, several days before Super Bowl Sunday.)
YouTube TrueView Advertising Cost Per View
According to comScore, Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in November 2015 with 174.5 million unique viewers in the U.S. In other words, YouTube attracts an audience that’s 52.5% larger than America’s most watched TV broadcast of all time. And YouTube does that month in and month out.
So, what’s the equivalent CPV for a TrueView campaign on YouTube? Well, according to the Tubular Labs benchmark, it was $0.07 a year ago, but closer to $0.08 today in the U.S. (The benchmark includes all 2014 and 2015 US campaigns managed by Tubular Labs. The campaigns selected were managed by Tubular Labs with the objective of acquiring views using TrueView InStream. Data above is based on historical campaigns. AdWords pricing and performance is subject to change based on AdWords buying behavior. All campaigns excluded Google Display Network.)
Of course, there are other variables. In addition to the country that you are targeting, asset length and overall asset quality will also typically impact price. So, the average CPV can vary. For example, $0.09 for a 5- to 7-minute-long asset, and $0.11 for assets that are over 7 minutes long. The more targeted your audience, and the share of voice you are buying (spend level per day divided by target audience size) will also affect your average CPV. It also depends on your video ad’s view rate, since higher view rates tend to have lower CPVs.
But, in general, $0.08 is a good CPV for a TrueView campaign in the U.S. for an asset that’s under 5 minutes long. And, unlike TV, the average CPV on YouTube remains the same whether your TrueView video ad is 60 seconds long or 4 minutes long, like “Hyundai : A Message to Space.”
Nevertheless, this means that the average CPV of Super Bowl commercials which are 60 seconds long is roughly equivalent to the average CPV for YouTube video ads which are 60 seconds long. So, what should video marketers do with this strategic insight?
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Shifting Ad Dollars from TV to YouTube
Well, based on recent research and YouTube Brand Lift data, you have two options – the video marketer’s equivalent of the “option play.” One option involves combining TV and YouTube. For example, Google recently commissioned Nielsen to conduct a study of 2,984 TV campaigns in the U.S. and look at how the total reach of millennials would be impacted if these campaigns had replaced some of their TV advertising with YouTube ads. The study found that without spending an extra dollar, 46% of the campaigns would have benefited from a TV and YouTube combo, with an average increase in millennials reached of 42% compared to TV alone.
Boosting existing TV campaigns with YouTube advertising also increases brand metrics. In another recent YouTube Brand Lift study of 656 campaigns, brands that added TrueView to TV saw relative lifts of 18% in brand awareness, 23% in ad recall, and 13% in consideration among their YouTube audience.
The other option involves moving dollars allocating to TV to YouTube instead. To find out if advertisers can expect a better return on their ad spend (ROAS), Google recently teamed-up with MarketShare, and use a method well-known to many brand marketers: media mix modeling (MMM). MMM can provide an insight into which advertising channels have the best ROI, and what results would look like if more media dollars were allocated to those channels. By looking at the average category media investments made by publishers, they found that your ROAS could be higher on YouTube.
Across the categories Google and MarketShare looked at, brands were seen to be investing at least two-thirds of their media budgets on solely on television. But that needs to change as ad spend on YouTube can yield a higher ROAS – from nearly 2X higher for smartphones to 4.9X for soda, 6.4 X for shampoo, and 8.5X for toothpaste. Higher ROAS is tied directly to increased revenue. One category highlighted was that of action movie tickets. Google found that at average spend levels, $1 spent on TrueView generated 7X the box office revenue of $1 spent on TV. For action movie tickets, a 20% shift of ad budget from TV to YouTube would have increased marketing-driven revenue by an impressive 25%.
So, whichever option play you choose, the results are much more likely to be significantly greater than the typical “three yards and a cloud of dust” that you’re likely to get from sticking with TV commercials.