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Will Youtube destroy television revenues in 2016?

Category: Advertising in Africa,Digital,internet marketing

Date: August 22, 2012

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Women's 100m heats, London Olympics 2012

The London 2012 Olympics is a nightmare most Kenyans can’t wait to wake up from thanks to Team Kenya’s record shattering, below-the-belt performance: 2 gold, 4 silver and 5 bronze medals. Compare this drought with the appetising harvest at the Beijing 2008 Olympics: 6 gold, 4 silver and 4 bronze.

Besides Kenya’s tearful outing, the London 2012 Olympics bagged a gold medal in social media advertising on the internet for being the first olympics ever to stream both live events and replays on Youtube: www.youtube.com/olympics.  The results vindicate that decision. As of 13/8/12, one day after the games ended, the YouTube channel had enticed over 330,000 subscribers and recorded over 35 million video views. The International Olympic Committee’s (IOC) other social media channels’ performances were also spectacular: 3.7 million Facebook likes, over 950,000 Google+ recommendations and over 1.5 million Twitter followers.

TV stations should be scared, very scared

Back in the day TV stations in Africa, particularly state owned (and mostly monopolies), salivated when events such as the Olympics and the football world cup arrived. This is because even though they had to buy rights to screen games, they recouped their costs by increasing their ad space rates. The annual Super Bowl is the poster pig of the latter in action. In 2012, the average cost of a 30-second TV ad cost was $3.5 million (approximately Ksh298 million).

TV stations still – and will continue to – salivate at the commercial opportunities served every four years. But YouTube may force them to go on a forced diet and here’s why.

●     Precise targeting. The London 2012 Olympics YouTube channel offered viewers the option of watching various games from archery to wrestling. This benefit allowed advertisers to precisely target potential customers watching specific matches/niche sports. Contrast that benefit with the current set up in which TV stations focus on guaranteed eyeball attracting sports such as athletics and football. If you sell helmets and you wish to promote them to audiences watching an Olympics canoe slalom race, sorry, TV stations don’t screen live contests of such niche games.

●     Exclusivity. The YouTube channel was a 24-hour, games dedicated channel. This meant that your ad would get guaranteed exposure. Compare that benefit with the current set up where you have to work within TV stations’ programming schedules if you want to market your brand because they also have to interrupt the games to screen other programmes that pay their bills such as news and soap operas.

●     Third. YouTube gives advertisers two payment options depending on their campaign objectives: bidding via Adwords or reserving ad space. Compare this benefit with the current set up where advertisers pay according to TV stations’ rate cards, not according to the former’s campaign goals. And I won’t beleabour the point that over 4 billion videos are viewed daily on YouTube.

●     Fourth, remember the statistics in the beginning of this post showing that over 30 million videos were viewed on the London 2012 Olympics YouTube channel? Those, ladies and gentlemen, are results. Additionally, you can measure other metrics such as average cost of each click or a thousand impressions and the number of viewers who converted after they watched your video ad/s. Try asking the TV station/s where your ad/s showed for a breakdown of how many audiences viewed your ad.

The next sports extravaganza will be in 2014 when Brazil hosts the football World Cup. Hopefully by then, internet bandwidth in Africa will be more widespread and cheaper than they are now.What will African TV stations do if their current heavy spending clients marketing in Africa decide to fatten YouTube’s waistline instead? Is any media planner in an African agency of advertising seeing the graffiti on the ‘Tube?’

For marketers seeking to advertise on Youtube or other online marketing platforms, contact us today to schedule a free consultation.

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2 Responses to “Will Youtube destroy television revenues in 2016?”

  1. Comark

    I think I watched all the live events that I wanted on youtube, plus I could revisit the great moments at will if I missed them.

    It spells the end for TV monopolization of major sporting events. If only this could happen for football :-)

    Reply
    • Joshua Wanyama

      If we get in in football, bye bye DSTV. I will even buy the largest Zuku internet package they have. But is was fresh catching the Olympic games on Youtube. Real neat move too.

      Reply

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