YouTube, AOL Need to Pull the Right Viewers to Keep Advertisers Happy

Recent announcements by YouTube, Otter Media, and AOL have given me the strange feeling that I’ve seen all this before. They were all about the big online broadcasters creating online video content that acts like a magnet and a screen just like special interest magazines once did. And the success of each of these endeavors depends on the ability of their online video content to attract a segment of buyers which, in turn, will attract enough endemic advertisers to sustain them. So. what are the announcements I’m referring to?:

YouTube to Invest in Biggest Stars, Otter Media to Buy Fullscreen

On Sept. 18, 2014, Peter Kafka of Re/code reported, “The world’s biggest video site is paying people to make videos. Again.” He added:

YouTube is planning to invest millions in some of its biggest stars, in deals intended to create high-quality content for the site. The deals are also designed to encourage those stars to keep working on YouTube instead of migrating to other platforms.

On Sept. 22, 2014, Otter Media agreed to purchase a majority stake in Fullscreen. Otter Media was established by AT&T and The Chernin Group to invest in, acquire and launch over-the-top (OTT) video services. Fullscreen, founded in January 2011, works with more than 50,000 content creators who engage 450 million subscribers and generate 4 billion monthly views.

On Sept. 23, 2014, AOL announced the Fall premiere dates for its 2014 slate of programming. Beginning on October 6, AOL will roll-out “Laugh Lessons with Kevin Nealon”, “#CANDIDLY NICOLE”, “True Trans With Laura Jane Grace”, “The Future Starts Here with @TiffanyShlain”, and “My Hero” throughout the rest of the month.

Video as a Special Interest Magnet, and Screen Filter

So, creating online video content that acts like a magnet and a screen, just like special interest magazines once did, is the way forward. For YouTube, AOL, and other online properties, video content needs to attract a segment of buyers which, in turn, will attract enough endemic advertisers to sustain them. Is that really so hard to do? Well, consider the concept that Salar Kamangar, a senior executive at Google and former CEO of Google’s YouTube brand, explained at D: Dive Into Media in January of 2012. Kamangar said:

If you see a dog on a skateboard video, the CPMs, the cost per thousand impressions, are about $2. Now, if you package that as part of a dog lover’s channel or a skateboarding interest channel, that same video can command a $20 CPM.

So, you can figure out how to create the kind of content that attracts your target audience and engages them over the long-term, which, in turn, will build enough endemic advertisers to sustain you. Or, if you’re feeling lucky, you can always try throwing spaghetti at the wall to see what sticks. 

Treat Video Content as Editorial Content

About 25 years ago, I was the director of marketing for PC/Computing, a monthly magazine published by Ziff-Davis. (It’s worth noting that Suzie Reider, the managing director of Brand Solutions at Google, and Brian Cusack, the Industry Director at Google, also worked at PC/Computing back then.) We went to a national sales meeting in Colorado along with our counterparts from PC Magazine and PC Week, which were also published by Ziff-Davis.

Before the meeting, none of us really understood that each magazine was targeted at a different segment of the market. So, up until then, all of us acted like our editorial content was an undifferentiated mix of news, reviews, columns, and how-to articles and that advertisers only needed to reach our readers, not the readers of our sister publications.

Ziff-Davis had pioneered special interest magazines like Car and Driver in the mid-1950s before focusing on the computer market in the mid-1980s. Editorial content in special interest magazines acted like a magnet which attracted “brand specifiers” or “volume buyers.” But that editorial content also acted like a screen which filtered out readers who didn’t have a special interest in the magazine’s mix of news, reviews, columns, or how-to articles.

Brand Specifiers, Volume Buyers, and PC Champions

pc_computing_09_94The benefit of special interest magazines to endemic advertisers, advertisers whose products and services directly addressed the “brand specifiers” or “volume buyers” in a specific market. If you published a car magazine, for instance, then General Motors, Ford and Chrysler were endemic advertisers. And if their magazine ads were information-rich, then readers would see them as relevant and interesting content, too.

Ziff-Davis had surveyed people who had read PC Magazine, had purchased PC products and services, but had not subscribed to the publication. The study uncovered a new segment of PC buyers. This group was less technical than PC Magazine’s readers and less interested in that publication’s benchmark tests. But, this segment played an important role in championing the adoption of innovations in their organizations and social networks and was more interested in the innovative applications and business benefits of PC products and services.

The Ziff-Davis Network was giving our endemic advertisers – particularly the larger ones like Dell and Microsoft – the opportunity to create information-rich ads that could be tailored for each of these three segments. Why shouldn’t they run the same ad in PC Magazine, PC Week, and PC/Computing? Well, if Brand Specifiers, Volume Buyers, and PC Champions had preferences for different editorial content, then advertisers needed to create different information-rich ads for each of these market segments, too.

Tailoring Advertising to Reach the Largest Target Audience

And the benefit of tailoring their advertising content just as we were tailoring our editorial content was this: In most organizations, brand specifiers, volume buyers, and PC Champions all had a seat at the table when it came to deciding whether or not to migrate from DOS to Windows applications or replace minicomputer-based office automation systems with networks of PCs. This is why the innovation-decision process in organizations typically takes longer than the innovation-decision process for individuals. But, by enabling advertisers to reach all three of these market segments with relevant, but tailored information, Ziff-Davis was helping them to accelerate the buying process.

I know this probably appears like ancient history to internet marketers and video content producers. But, these insights into special-interest magazines and endemic advertising enabled Ziff-Davis to flourish at a time when general-interest magazines were struggling to compete against television. In other words, Ziff-Davis was narrowcasting successfully in an era when other print media weren’t broadcasting as cost-effectively as network TV could.