Marketing

Why YouTube Advertising Is The Solution To Rising TV Ad Prices

December 22, 2023
Youtube logo and name written on a laptop screen in front of which is a mobile phone screen with YouTube logo and name on it

TV advertising pricing is increasing, estimates range from a 7 to 24% price jump. It raises the question of whether it is still viable enough to continue advertising on this platform in the same way. It will become harder to reach your target audience at the desired frequency with the same budget. So perhaps there are better alternatives?

YouTube as a platform offers an interesting alternative. People might still think that YouTube is only for the younger generations and doesn’t reach a wide enough audience because of that, however, this is not the case anymore.

Currently the overall audience of YouTube for 18- to 49-year-olds is higher than all TV cable networks combined. In addition, it offers marketers more tools to play around with to improve their effectiveness, let’s find out what they are.

The power of digital

YouTube has significant advantages over linear TV with the tools it provides. For example, since it is part of the Google ecosystem the advanced targeting possibilities are tremendous.

We know people’s intentions based on how they search the web, matching these intentions with suitable advertising is easy and very effective. It is also very cost efficient, since it only reaches your relevant audiences and therefore has less waste.

Moreover, on YouTube you can effectively target your relevant audience repeatedly, which is difficult to do on linear TV. Repeating the ad 4 times to 4 relevant people is no problem, but on linear TV the equivalent would be targeting 16 people only once.

Another plus is ad sequences to better communicate a story. Once a specific user has seen the first ad, the other ads in the sequence will be displayed after, avoiding oversaturating the same message. For example, you can run a long 1 minute ad followed by short 20 second ad echo’s.

The changing landscape of TV

The definition of TV is changing for the end consumer, nowadays 37% of people say that Netflix and YouTube are included in what they consider “TV”.

YouTube is also the video platform that would be missed most if it was no longer available, according to a survey from Ipsos. It’s not surprising, the sheer variety and depth of content on YouTube is unrivaled.

You can be on YouTube to pass the time and be entertained, but you can also watch detailed guides on very niche topics, such as: how to tie a tie (an all time classic).

Combine that with the option to watch it whenever you want, instead of being stuck in a schedule and you’ve got a golden combination.

The popularity of the platform is validated by data. Market research in the Netherlands shows that in June 2022, the platform reached 13 million people (years 18+) with an average watch time of 45 minutes a day.

If YouTube would be a TV station, it would be the biggest by far up to the age of 49. It proves that it’s not just a platform for young people anymore, it’s for everyone.

Finding the perfect mix

Brands are starting to recognize the potential of YouTube more and more, since the platform sparks the interests of consumers discovering new brands and learning more about them.

A perfect example of this is a brand called Telia, which wanted to find out if they could reach their audience more effectively by redistributing part of their ad budget from linear TV to YouTube.

In collaboration with AudienceProject they ran 2 test campaigns, the first was 88% TV 12% YouTube, the second was 71% TV and 29% YouTube.

With the second campaign, they achieved 10% more reach to their audience group for 10% less of the cost. The efficiency therefore went up by 20%, a great success story, read the full case here.  

YouTube has now also released a TV in reach planner feature in many markets. It provides you an estimation of how much of your target audience will be reached with a certain TV and YouTube ad split.

The tool is coming to the Dutch market very soon, but in the meantime you can still use reach planner, which is solely focussed on YouTube ad reach.

YouTube on TV

A very interesting stat and prediction through the reach planner is that a third (33%) of the impressions are realized through YouTube connected TV.

These are televisions that are connected to the internet, whether it is through a smart TV app, gaming console or something else.

In the Netherlands, 7 million people watched YouTube through their TV at some point, which is 40% of the entire population.

The interesting fact is that when people watch YouTube through their TV, they portray behavior that is similar to an old school TV audience.

YouTube Connected TV
YouTube Connected TV
33% of all impressions

 

Advertisements are skipped less frequently, ads on connected TV have a 20% higher ad completion rate than other devices. The watched content is also longer and viewing sessions are higher with more co-viewership.

As a result, YouTube is now the biggest ad-enabled connected TV platform in the Netherlands, this provides huge opportunities.  

So connected TV has all the benefits of digital, but brings it to an old school TV environment. It allows for advanced targeting, e.g. only targeting viewers who are interested in buying a new smartphone. You can adjust your ads based on the audience and measure the brand impact.

Additionally, you can scale your campaigns up or down whenever you want. This flexibility is valuable especially on connected TV, as it brings the advantages of digital to the TV platform.

You can scale your advertisements based on demand and ad performance. This ad performs well? Let’s scale up.

A great example of YouTube ads and connected TV is the Netflix show Stranger Things. For season 4 the creators set the goal of  making it the most watched season yet, with that in mind they used a campaign that included non skippable YouTube connected TV ads.

Consequently they had a reach of 40% of their target audience and achieved a positive brand and search uplift across all their markets.

More content types

There are also more possibilities for the ad duration, if you’d like to run a full 20 minute video no problem. Some companies are actually implementing this with great success.

Absolute Motors runs full length episodes of their YouTube show as advertisements and manages to achieve a 40% viewing duration. A really effective strategy, since the videos are less intrusive than normal ads.

Viewer interaction

The advertisements on connected TV also have a unique feature that allows viewers to directly interact with the ad, YouTube calls them ‘brand extensions’.

During the ad you have the possibility to include a ‘send to phone’ button, if clicked, it will send a push notification to the users phone which takes them to an online environment of your choice. Meanwhile the content on the TV will not be interrupted and keep playing.


Conclusion

We hope this blog showed you why YouTube advertising (especially on connected TV) is the solution to rising TV ad prices. Here are some of the key takeaways:

  • The term TV now also includes YouTube and other streaming services.
  • YouTube is mainstream: 13 million people reached a months with average watch time of 45 minutes
  • Use all the tools YouTube offers (reach planner, advanced targeting, ad sequences, viewer interaction, etc) to create your most effective campaign.
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