The article imbibes insights from media planners analysing YouTube's decision to surge the cost of YouTube Masthead to Rs 1.4 crore and it's implications on brands.
It was a usual newsy Tuesday morning when a message popped up updating that media planners have received a notification from YouTube about revising masthead pricing from January 2019 to INR 1.4 crore per day, which is a near 100 per cent hike at the current INR 72 lakhs per day rate.
The Google owned platform has 1.8 billion unique monthly visitors or nearly one out of every two people on the Internet. It recently celebrated it’s decade-long journey in India where it has 225 million monthly active users from 180 million in 2017 on mobile phones alone. Sans doubt, YouTube forms the core platform for marketing in leading advertisers’ media mix.
Likewise, YouTube Masthead is one of the highest impact ad offerings from Google which promises brands with seamless working across devices and offers a takeover of the homepage for a full 24 hours. The social media giant also claims to give the marketers a huge, customizable canvas for the brand message with higher reach and drive brand activity across YouTube and to the website.
For the unknown, YouTube Masthead are the rich media 970 x 250 pixels ads that occupy the top third to half of the home page and reach out to roughly 60 million people generating almost 900mn plus impressions. In April this year the prices had gone up to 72 lakhs from 40 lakhs in January 2018 from the earlier 20 lakhs in 2017. From Disney’s The Jungle Book to Lionsgate’s Insurgent to Chevrolet’s Malibu LTZ to Samsung’s Internet of Things (IoT) & Bixby showcasing ‘Rahul’s Family’, more and more marketers are hopping onto the homepage. With the ad rate revision now going into crores, will brands be open to shell out?
We got talking to a few media planners in the industry to get a deeper insight on the implications of Youtube’s this move on the brands- will they be open to pay more premium and is it justifiable of Youtube to take this step?
Implications on brands
Suyash Dongare, Media Director, Carat India thinks that it’s only right for Google to milk the opportunity as the agencies are looking at double digit growth in media spends.
“With pricing that steep, Google will need to put in extra effort but the advertisers won’t be disappointed by the results delivered. Acceptability will be high among brands who have seen the CPMs drop from INR 12 to INR 6 within a span of year. The price correction is only a reconciliation to the pricing standards,” he adds.
Reach comes at a cost and what if it’s in crores. They have no option but to pay for it. Agreeing to this, Rohan Chincholi ( Head of Media and Business - West and South) Havas Media feels that the digital platform has become very cluttered and every brand has pages, inventories and banners; so many formats coming in to find visibility which is uninterrupted.
“Basically ad spots that you see when you go to YouTube- the only challenge is that it’ll be focused on very selected brands; not every brand can afford to spend about 1.4 crores even though it’ll give a phenomenal reach. Digital has to get its own identity. This is where brands want to capitalize on these days and they’re doing it even at the rate of 70 lakhs. They are fighting to get a position there. the move is definitely going to be acceptable because it is justified by the numbers”, Chincholi noted.
With fast growing video consumption, the YouTube exposure to number of unique users has been on a tangent. This obviously prompts them to increase the pricing considerably, justifying the reach they give to a Brand.
“But this will also be a testing phase for them, primarily because spending this huge amount on a single platform for a day, restricts a majority of brands to try other platforms. Right now I can just think of some top e-commerce brands who wants to drive massive traffic on festive sales or some major launches,” states Amit Gupta; Managing Partner, Httpool India.
The impressive reach of Youtube Masthead in India
Reaching out to a wide range of audience, we second the fact that YouTube Mastheads are true in delivering the expected ROI through the platform for the top spenders across the countries. A lot of brands have to book the slots six months prior, in fact YouTube Masthead ads for the remainder of 2018 are already booked, if reports are to be believed .
Chincholi noted that there are multiple ways of integration possible through the spots. “One of the good things that YouTube does is that by default it keeps the video mute, even after that brands tend to buy these spots. We see brands like Amazon and Samsung taking up the ad spots again and again and the repeat itself signifies the quantum of traffic that they are able to generate. The mindspace that a YouTube masthead can give a user is far vulnerable.”
With min of 80 million audience a day supported by 800 Million impressions makes Youtube Masthead the most visible inventory for a high impact campaign, shares Dongare. Case and point, FMCG players like Mondelez own it every year on Valentine’s Day and e-commerce players on their respective sale days. Tech players look out for the property to deliver record sales on the launch day. With 365 opportunities in a year, Google internal product teams find it difficult to sort dates.
With the ever growing digital revolution largely backed by video, Youtube has been successful in taking steps in the direction updating its policies and inventories.
Though Gupta feels that the pricing is very much justifiable from YouTube point of view, with the kind of reach they offer, it might not immediately justify the brands perspective of burning this big amount in a single day on a single platform. This pricing levels can really work if Brands are able to dig out some budgets from their mainstream TV media.
Google has hit the bull’s eye supported by the value offering from the unit. Brands will have to calculate the ROI deliveries from the perspective of their disposable marketing monies. At the end of the day, Dongare believes that no platform in India has an alternative for YouTube masthead. Hence it’s here to stay but pricing will be discussed a bit longer in the media meetings.
“Business is all about opportunity at the right time. If the traffic increases, the cost is bound to go up,” Chincholi backs Youtube for this decision.