YouTube Is Slashing Prices to Attract Advertisers for NewFront Money

YouTube Is Slashing Prices to Attract Advertisers for NewFront Money

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Ad Age is reporting that YouTube is reducing the charge for Upfront money this year ad they approach the NewFronts next week.  Last year, with all the promise of the Original Channels Initiative and all the stars that were going to make YouTube more “legit.”  While the normal, everyday ad rates will be staying the same, there is a new outlook on the Upfront money.  Where certain packages could cost over $10 million last year, including a $62 million music package, this year YouTube’s minimum requirement will be a cool million.  They have apparently learned from their mistakes.

YouTube’s Dropping the Asking Price for Advertisers at NewFronts

According to the Ad Age article, YouTube sales head Lucas Watson states:

Last year we were rigid; we got a few big advertisers with huge checks…We got a lot of feedback about being inflexible so now we are breaking them down into more manageable chunks.

And, as the focus was on the Original Channels and the $100 million spent to get those off the ground, this year YouTube is focusing on what already works to sell these million-dollar packages, all genre-based: sports, gaming, fashion, etc.

What’s more, is that YouTube is trying to appeal to the family unit and luring advertisers who may not want their brand associated with some of the more risque content on YouTube.  That’s why they struck a deal with Alliance for Family Entertainment, which is a group of 40 national advertisers representing 37% of all TV ad dollars.  Included in that group is Unilever, Wal Mart, and Subway.  They are forming to create a “family-friendly” package that will play across 32 YouTube channels.

Also, unlike last year, there won’t be any exclusivity. When one advertiser got the exclusive rights to play only their ads on a certain channel, the same ad would play over and over and would create “ad fatigue.”

The other weapon in YouTube’s arsenal, according to Ad Age, is appealing to the “light TV” viewers.  A problem TV advertisers have is reaching those who either don’t have a cable subscription or watch just a little bit of TV, and having to spend more just to find them.  Using something called an “Extra Reach Tool,” YouTube plans to show the data to advertisers that shows more than half of all the ad campaigns will benefit from a 16% shift from TV to YouTube.  All for less money, too.

For more on the story, take a look at the Ad Age article.


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