Dive Brief:
- Interpublic’s Magna Global signed an upfront deal with YouTube from this October through December 2017 that shifts $250 million in ad spending from TV to the social media video platform.
- The deal commits the agency to spending at least that amount on Google Preferred’s premium ad space on YouTube.
- According to the Wall Street Journal, what made this deal different is that Magna Global said the ad dollars will come out of its clients’ TV advertising budgets rather than digital budgets.
Dive Insight:
In a way the deal removes one of the final barriers between traditional TV and online video content. A major, entrenched ad industry player sees advertising on YouTube no different than TV in terms of where the money comes from. So essentially, Magna Global is making no distinction between video ads whether they appear on traditional TV or online.
The Journal reported that Magna Global’s Google Preferred commitment is four to five times larger than 2015 and that its TV spending will decrease this year because of the deal. “We have negotiated a meaningful share shift from linear television to digital video,” David Cohen, president of Magna Global North America, told the Journal.
That shift happened with an advance okay from many of its clients.
In related news, Bloomberg reported that YouTube intends to launch a paid subscription called Unplugged that will provide people with a bundle of cable TV channels streamed online, and might be available as soon as next year.
“We aim to provide more choice to YouTube fans -- more ways for them to engage with creators and each other, and more ways for them to get great content,” Sundar Pichai, Google’s chief executive officer, wrote to Alphabet shareholders. “We’ve started down this journey with specialized apps like YouTube Kids, as well as through our YouTube Red subscription service.”
As consumers continue to spend more time on digital, and as ad dollars continue to trickle down to digital, away from traditional channels, moves like YouTube's and Interpublic's make it clear that there has been a meaningful shift. Marketers are acknowledging they want to get the most out of their spend and the return is greater online.
