Geico Misses Value of YouTube Star’s Audience

Before we armchair quarterback Geico’s YouTube spend today, let me share a secret story. The names will be changed to protect the innocent.

An extremely popular YouTube star (let’s call him Spiffy) last fall mentioned something fascinating to me in private. A major consumer-products good brand (let’s call them “Yummy Snack”) paid him handsomly to create an enteratining video incorporating Yummy Snack. A member of the Yummy brand team had shared the success story at a conference I attended, but left something critical out. It seems Yummy’s agency hadn’t asked Spiffy to post the entertaining/promotional Yummy video on Spiffy’s channel!

The talented Spiffy voluntarily posted it on his channel, and THAT was the Yummy video that popped. Not one posted by Yummy Snack on some branded YouTube channel page. Not because media dollars drove views. I thought that Spiffy’s generous move was so cool, I’ve decided not to call out Yummy’s agency on this horrible oversight.

YouTube might have saved Yummy, but can you blame them? Google is more concerned about selling media dollars than tipping off agencies to the organic power of a star’s audience.

YouTube doesn’t make money when a promotional video goes viral… only when there’s an ad buy.

Geico Gecko and Numa Numa kid

I like to think agencies have learned something in the past year, so it’s sad to find history repeating itself even today. Geico insurance purchased the expensive YouTube homepage spot to boast its “Gecko & Numa Numa kid video,” which prerolls (without audio). Today’s ad spend cost the Geico more than you or I make in a year, and Gary Brolsma (NumaNuma), the online-video sensation, isn’t posting the video on his own channel concurrently.

Are you kidding me? Much of the value of the YouTube stars is his or her embedded audience. Most stars have fans that will propel the video to the top of the “most watched” and “highest rated,” and share it with friends (assuming it doesn’t suck).

As an example, if Fred made a video endorsing Poprocks, his video would get million of views. If the agency posted it — even with some advertising dollars promoting it — it would get far less.

For a moment, let’s put aside the debate about Geico’s agency associating itself with the NJ kid who is mostly a “one-hit wonder” lacking a recurring audience.  Numa only has 35K subscribers and his recent videos are fetching just a few thousand views. Even so, Numa dual posting the video would certainly attract views for an ROI that’s as good as any media spend. The agency gets credit for driving homepage views to its own “Its the Gecko,” channel instead of Numa Numa’s… but one can’t help but wonder if there’s a longer vision for that branded channel or if it was an afterthought.

Why on EARTH would Geico not pay Gary a few clams to post it on his channel? Even without a lot of daily views, Gary could have posted it on his channel concurrently, and gotten views by:

  • Showing us a “behind the scenes” footage
  • Featuring the video on his channel page
  • Making the Geico spot a video reply to his big hit, where it would get residual views

I’d love to know if this was an oversight or a thoughtful decision because, for instance, Gary wanted more coin to distribute it than made sense for the agency. But absent that, it’s going to be my case study for being “half pregnant” on YouTube– smart enough to tap a star and invest in media, but not savvy enough to tap into the creator’s audience as well.

The lesson: It’s not smart for brands to tap into know YouTube stars without buying media, and it’s not smart to buy media without getting some “street cred” from a known YouTuber. It’s smart to do both. Who’s going to help brands figure this out?

(I’d like to use the case study I referenced at the beginning, but the star would get tainted by the agency for mentioning this slip and “Spiffy” doesn’t deserve it).

The Hidden Layer of Online-Video

There’s a continuum of video content online, and it’s often misunderstood because we polarize each end. Let’s stop bifurcating, and look at 3 layers of video content. There are advantages to each one, and we’re missing opportunity in “the great debate” between “professional” (networks) and “user-generated content” (UGC).

Video Content Layers are Just Like the Stratosphere. But Different.

Layer 1: Professional content (the only “safe” place to advertise): Advertisers, when they’re not convincing marketers to create their own content, are often urging them to buy ads around “safe” professional content. We don’t see as many ads swarming around such user-generated content (UGC) as cats pooping on skateboards, or dogs riding toilets. Of course the influx of ad dollars into the online-video medium (which is trending upwards while most other ad mediums trend downward) will create a problem. Either ads will get expensive, or online-video’s professional content will have to expand rapidly. True, we’ve seen a proliferation of quasi-pro content that is almost as good as television, and far better produced than most online-video. Unfortunately, that market is hurting more than any because it has neither low production costs or large audiences.

Layer 3: User-generated content (the cheap buy): UGC offers much lower CPMs, so you can reach a wider audience efficiently. You can target specific niches or demographics, and the UGC viewer is, frankly, easier to distract from their content. Want to get someone to respond to your stupid “shoot the monkey” banner ad? You’ll have better luck on a weather and gaming sites than on a professional site (the Wall Street Journal, where audiences are generally engaged in the editorial content). YouTube has limited its number of “partners” who receive a portion of online ads, however. There’s a lot of crap among UGC and a lot of it is inappropriate for ads or copyright infringements. At some point, it’s not worth YouTube’s time to filter creators with tiny audiences. That’s not to say my videos are better than the guy that just started posting on YouTube, of course. Given a random a

The Hidden Video Layer

Layer 2: The Hidden Online-Video Layer: The hidden layer is the overlooked one between pro and UGC, so I’ve decided to call it “The Hidden Video Layer.” I’m creative like that. And I’ll have to say this 100 times before anyone listens. It’s real, it’s big, it’s important to advertising, and most marketers don’t know it exists. Let’s look at three examples.

  1. If a YouTube partner (amateur) has a huge following (50 million views and 100K subscribers) on videos about  videogames, we’d agree that it’s an incredibly smart place for ads and sponsorships selling the Wii or acne cream. There’s lots of ad inventory in that “hidden layer.” Fred — the most popular kid on YouTube — draws more daily views than many prime-time television shows. More importantly, when you aggregate the views of the top 100 amateur creators, you’ll far exceed the audience of almost any daily television show! Little old Uncle Nalts may have 60 million cumulative views, but gets 100K plus views a day. But combine me with a few more, and you’ve got traffic that beats many websites (and the audience is more engaged).
  2. If Yahoo saw fit to create a 24×7 “Lindsay Lohan Online-Video Show,” that’s where you’d want to sell your latest Lindsay Lohan action figure (handcuff accessories sold separately). The video content certainly wouldn’t need to be “professionally produced,” and arguably you’d want to keep costs down to $200 per minute. This channel, while not worthy of professional production, is certainly not UGC. BTW- I’m not advocating for a Lohan network any more than I understand Nancy Grace covering the Tot Mom the past 6 months. Jessica fell into a well, hon, and we’re over it.
  3. To use a non-video example, your aunt’s blog about her daily struggle with foot fungus is somewhat different from the popular TechCrunch blog. But we call them both blogs, and media loooooves its recent stories about bloggers failing to make a living on the medium. Four years ago, we saw stories about brave editors ditching media corporations and starting their own profitable life as a blogger. It’s simple: a blog’s not a blog. And a video channel isn’t a video channel. If you’re advertising, you want to reach large but targeted audiences. That usually means you’re surrounding or interrupting professional content, but not for online video at this point in time. Making well-produced content doesn’t guarantee viewers any more than creating amateur content guarantees a lack of an audience. Make sense? I sometimes spend hours on these posts and minutes on my videos, and dozens will read these words while hundreds of thousands will see my videos. Bad example since neither are professional.

Audiences have zombie-like desire for some amateur video creators

Now this “missing video layer” offers advertisers 8 unique distinctions. I’m holding up four fingers on each of my hands right now, and jumping up and down.

  • Established audiences. No smart producer or advertiser would try to build a new Fred show- Fred already has nearly one million people that have “subscribed” and are waiting for his next video. If I pitched “Fred” to NBC two years ago, I’d have been tossed from the building. But Fred usually gets far more views per video than almost any professional content online. Would you rather “roll the dice” by shooting a viral video, developing branded entertainment, or simply leverage Fred to reach “asses in seats”? Many amateur video creators on YouTube, for instance, have audiences that surpass those of entire video sites.
  • Loyal and Passionate Audiences: viewers consume their YouTube stars like zombies in pursuit of a brain. It’s an indisputable fact. If Fred starting wearing Madonna rings on his wrist, they’d be back in style.
  • Quality: It’s not “professional and TV-like,” but it’s good enough for the audience. I’d rather watch someone I like on a webcam than a boring sitcom or reality-show in HD. If you trust audiences will eventually migrate to “quality” content, then please reexamine what quality means in this medium (at least in 2009).
  • Relevance: Ad targeting is easier as we move deeper into amateur content. “The Onion” has brilliant comedy, but “You Suck at Photoshop” probably has a more specified demographic that helps brands target. You want to reach people that celebrate their adolescence (at any age) or soccer moms? Check out Nalts. But Uncle Nalts isn’t likely to deliver too many right-wing, wealthy, retired men to sell time share or cigars. Relevance is easier now that video content and audiences are growing and fragmenting. Growfragmenting. Want to sell toe fungus medicine? Go to a toe fungus blog, not a health ‘n wellness website. There’s a reason Google text ads outperform almost any targeted display media buy. Relevance. Unfortunately, this makes an ad buyer’s job quite complex and will require more creative treatments than television. But video makers take note: this means we’ll need more than three versions of our 60-second spot (default, gay, and the Hispanic/African American). And if creative budgets aren’t getting bigger, than amateur video creators are well poised.
  • Ad-Safe Content: Unlike regular UGC, most of “the hidden video layer” content is vetted to be ad friendly (a YouTube partner, for example, gets dumped if they break “terms of service” rules like being fowl or violating copyright laws). That’s as true for Nalts as it is for The Universal Music Group’s popular channel on YouTube.
  • Economic Sustainability: Most of “amateur stars” have low costs. So many are making a comfortable living while expensive video sites struggle (Funny or Die). As an advertiser, I’d rather do a deal with content or a distribution channel that is profitable.
  • Cost-Efficient Spends: You can saturate Fred’s channel with ads, or work with him and YouTube on a program that does far more than ads alone. Premium video creators, by contrast, simply need to charge higher CPMs given their higher cost-structure-per-view.
  • Scale: The deeper advertisers go into “the long tail” of video content the better their chances of being able to broaden and scale campaigns without sacrificing targeting & relevance. We may temporarily saturate some niches, but if there’s audience and advertiser demand, new creators will appear.

We’ve allowed ourselves — as viewers, advertisers, and creators — to obsess on the polars of the content continuum: From Oprah to “David After the Dentist.” From “Lost” to and “the giggling infant.” From “The Office” to “monkey smelling its finger.” There’s a lot in between.

There’s goals in them niche hills, advertisers. Gooolllllddd (he cackles with toothless grin and ominous, shaking index finger). Then again, during a gold rush I like selling shovels. Full of Hot Air; AppleTV Must Save Us.

I got all excited when I read that will distribute videos. Sadly, like most of the most-subscribed YouTubers, less than 5% of my traffic occurs beyond YouTube. I couldn’t even remember if I post to DailyMotion. That’s because YouTube dominates, but also because people on other video sites aren’t as loyal to them, and watch a fraction (maybe 5-10 percent) of the videos per week that a hardcore YouTuber devours. 

Back to Hulu. A search for “Nalts” on Hulu oddly produces just one result. One. A bit lower than the 739,000 items that Google finds. And it’s… a link to my fart video on “Funny or Die.” Not “Farting in Public.” No, the original short film, in which I fart at my son. That’s hot air, friends.

It doesn’t appear that Hulu is yet picking up the DaiyMotion videos yet. And who knows if they’ll go beyond “official content.” You see, a Nalts search on DailyMotion reveals HBO’s HookingUp as “Official Content,” but the Nalts videos lacks that badge o’ honor. I don’t expect to attract many fans of amateur short-form content in the near term. And we can be sure that long-form, network produced content will rise far above the charming little YouTube weblebrities. 

In a hurry? Let’s get to the point, shall we? May I just pop the friggin’ industry’s “Hulu proved TV online works” zit for a moment? Can I just squeeze my fat fingers around this lemming-like nonsense and shoot some pimple juice in your eye?

  1. First let me acknowledge that Hulu is far better than I ever expected. It’s simple, and it’s proof that networks can play well together… when facing a common enemy. The hulu party is over, however, once we all have media devices that don’t care where the video lives (hulu or, because then the networks will then again fight to get viewers on their own sites again… where they have control of metrics and ads.
  2. I don’t yet watch a lot of Hulu, because I prefer to have my long-form media intravaniously dripped while I’m in a reclining position in bed. And I like the HD quality of AppleTV/iTunes, or the cost/convenience of my NetFlix/Roku device (all-you-can-eat movies for $9 a month plus a $100 device).  I tolerate my horrible Verizon DVR (with its perverse $19.99 monthly cost), but that SOB going OUT tomorrow afternoon. It will be replaced by a TiVo plus a $5 Cablecard rental. Oh, sweet TiVo. I’ve longed for your angelic plink sound for two years. I did manage to get Boxee to stream Hulu on my AppleTV (thanks Peter Coffin), but I lost all of that when Apple pushed out an upgrade over the weekend. I’m too lazy to reinstall it, and it was a clumsy interface and poor quality. But I still dig Boxee, and it’s new.
  3. But back to Hulu and its hot farty air. I swear I’m going to punch the next journalist that rants about Hulu’s profit relative to YouTube. For starters, have you ever purchased media? Any print/TV media seller will gladly toss in an assload of Internet ads as a “value add.” So the networks, in a fit to jolt Hulu’s economic story, simply stopped giving away free Internet inventory. Given a relatively lean cost structure (outsourced to India), the Hulu site was *poof* “profitable.” And let’s put profit into context- I’d estimate that 5-10 minutes of Superbowl ads made more than’s topline last year.
  4. There’s no mistaking that Hulu is perceived as “safe” to advertisers. Just quality content. No crazy consumer-generated videos that corrupts advertising as we know it. Who wants their Cash for Gold ad next to David After the Dentist? Hulu solves that passive-aggressive motive of the mass media buyer (who regrets giving up his art passion for a soulless existence buying inventory). The media buyer can reluctantly “get digital” without having to actually talk to his agency’s red-headed stepchild — the girl we like to call the digital media buyer (he doesn’t mind suffering her mindless droning at happy hour, but her good looks are offset by the fact that without them she’d be working at the Department of Motor Vehicles).
  5. Meanwhile we have to assume two things. First, Google will find a way to monetize its 90 plus percent share of online-video consumption beyond the “tip of the iceberg” it monetizes today. And sooner or later, Google will give larger networks a vehicle to monetize content that’s at least as good as Hulu. 
  6. So the market is maturing, and I underestimated But ultimately the game changer is not a website with all of the networks shows partying together with ads. That’s progress, but that’s just the first step of a much more interesting movement.
  7. We’re getting so very close to having one dang media center in our home that has access to our own digital video, and web’s. I want comfortable access from any TV in the house, without 12 devices and contracts. I’ve got my money on Apple changing the game (like they did with music and mobile/pda/phone) in 2009/2010 with a new version of AppleTV (someone right that down). The Supercharged AppleTV is going to play better with and, and it’s going to provide the option to download and watch in HD (as it does now) or watch in lower resolution with ads for free. Maybe there’s a monthly fee, but not 8 different ones. 

And that, friends, is lovely. And the only loser in my futuristic super-media device that will be the Comcasts and Verizons, who know as much as elegant interface as I know about how to write a short blog post. I’ll be glad when we dissintehrmediate these fools (even if they supertax our bandwidth), and so will Hulu and the networks. Hey Verizon- love the big pipe you installed in my home, but I can’t wait to fall asleep to the sweet sound of TiVo and know I’ll never have to use your stupid interface again. 

Well now it’s 10:30. I think wifeofnalts will be asleep, so I can probably sneak in a few episodes of Season 3 Lost now. I borrowed this season after buying the first two on AppleTV. And now I have no patience for changing DVDs and suffering through their irritating introduction and transitions. Meh.

You laugh, but some jackass analyst is going to find a way to organize and profit from these Nalts-futuristic insights, and I’m posting this nonsense for free.

10 Decent Reasons Online Video Ads ‘r Recession Resistant

Oh shut up about the stupid recession, you big whiner. I’m sick of hearing about it — and just because it’s an economic depression doesn’t mean we all have to get clinically depressed.  

Seriously. You’re beginning to sound like that annoying friend who’s always complaining about health problems… The co-worker or neighbor who doesn’t know that the only right answer to “how are you?” is “fine.”

Yes, online advertising is soft. But here are 10 plus reasons online-video will survive and thrive. Read these because I had to think so hard for some of them that I popped one of my 87 remaining brain cells. The statistics, of course, are 97% made up.

Send these to your boss, customers, clients and peers. Or print them and shove ’em up someone’s profusely pessimistic discard hole. Yeah you heard me.

  1. The audience is rapidly growing and ads work 41% better better if they reach people.
  2. The niche content provides better targeting (than 84% of non targeted spending). 
  3. The cost of entry is cheap (unless you piss away $250K on a bunch of “viral video Hail Mary’s” that you post on that micro site… equivalent to a billboard in your basement).
  4. Amateur creators have huge audiences, and are hungry. They’re also really connected with audiences and influential. Your banner ad isn’t as lucky.
  5. I like to eat stamp collections but not collectors.
  6. Video is 93% more visceral and memorable than even rich-media. If I remember your product I’m 29% less likely to forget about it and not buy it.
  7. I was fooling around with features on my YouTube channel, and decided to make my account invisible because I feel like it. That’s a sidebar.
  8. Brands will need recession-proof innovation… instead of interruption ads, they’ll partner with creators who already have huge audiences, and get great deals. Add up the top few dozen YouTube stars and you’ll find they get more daily views than many of the media sites combined. Shoot I get around 100,000 viewers a day and I suck the funny right out of the web.
  9. There is no reason 9 or 13. There’s a 33% chance you won’t notice that because you’re scanning.
  10. Brand leaders will still want to innovate (73% more than the control, which included that fat guy you work with that twitches out about “process” whenever he hears about change). Grant, they will be 41% more selective than this year and 88% than during The Bubble. So dump the stupid unscalable crap (like another useless Facebook widgets and those pitiful Second Life pilots). They’re like the PR people during layoffs. They’ll be first to go.
  11. People still need customers or sales tend to go down by 29% or more.
  12. Because I said so, and I’m a viral video genius. Check Wikipedia if you don’t believe me. There’s a 51% chance you’ve never heard of Wikipedia.