Exit 30 Sec TV spots. Hello 'Digital Commercials'.

I chanced upon  what  I thought was a rather strange usage when I saw the words 'digital commercial' in one of the Indian advertising trade magazines on the internet today.  Did they mean an ad on YouTube I silently thought, as I read on only to discover that I was right. 

Something strange has happened to the ad agency of today.  Grappling hard to stay relevant since they are being overtaken by the digital revolution, the ad agency is quickly finding solace in the ad on YouTube.  It then gives them the credentials to say that they have embraced 'digital'.  When asked if they only do ads on TV, they are able to defend themselves by saying they do the 'digital commercial' for YouTube.  Typically the YouTube ad is an advertising extravaganza that is often a 5 minute video,  and has been a great new lease of life for the death of advertising as we know it.  

It is interesting that Adweek calls them the 'best 10 youtube ads' or ' the best 10 viral youtube ads' and so on.  But that is where the developed markets have reached.  In India we are still a little shy about calling them youtube ads and perhaps that is why the phrase 'digital commercial'.    In fact according to Adweek the most shared ad of 2015 on youtube happened to be from Droga 5.  Headed up by David Droga one of the most celebrated creative directors off the last decade at the world's most renowned award shows who set up his own agency a few years ago, promising to embrace the digital world.   The spot, by Droga5, is the  execution in Android's "Be together. Not the same" campaign. It is very very cute, and apparently all the footage is 100 percent real with no  computer graphics.

Unfortunately the ad didn't make it to the top 10 ads of 2015 on YouTube because it had a lot more views on Facebook and "only" about 25 million on YouTube.)  

Youtube Ads in India

According to one report the top 10 Indian ads on YouTube in 2016 have clocked a breathtaking 400,000 hours of watchtime between January and June 2016. Around 60% of this viewing was on mobile phones, Google said in a statement announcing its “YouTube Ads Leaderboard” for India.  Unfortunately I am not sure I have the number for how many hours were spent watching television ads, so it is difficult to compare.

And the top Indian ad was Bajaj V motorcycle at 3.6 million views.  ( Incidentally the #RanveerChingReturns ad  ( see my evaluation  of the ad on Linkedin ) has already beaten that record in a few days in August 2016 by crossing 4 million views in just a few days.)

Google Attacks TV

Saying Youtube ads generate a better return on investment most of the time, earlier this year Google  once again targeted TV advertising budgets by saying YouTube ads generate a better return on investment than TV commercials most of the time.

Google conducted a meta-analysis of 56 case studies from brands within six different types of industries, across eight countries in Europe between 2013 and 2016, as well as its own research. 

Google concluded, in the European study published in April 2016  to coincide with Advertising Week London, that at current spend levels, "YouTube delivers a higher return on investment than TV in 77% of studies." It is difficult to judge that statement as a superb way of selling Youtube and unselling TV, or if it is actual truth.  

The other view is that the challenges for YouTube to attract greater investment are typically skippability and scalability. YouTube's skippable ad model has an obvious impact on how much advertising is actually seen.

 The counter argument seems to be that if brands increased their spend on YouTube, they would  see their ROI fall, given YouTube's challenges as a medium. The assumption here is that the majority of YouTube viewing is by a relatively small group of heavy users (80% of viewing is by 20% of viewers). Also the fact that a majority of YouTube viewing  is a long tail of  user-generated content.  

But unfortunately TV Channels  as an industry don't seem to be coming together as a group  to take the Youtube challenge in any organised way, leaving Google to make random attacks on them as a a medium.  

In the meantime, the creative ad agencies are having a field day.  They have converted their skills of creating the 30 second spot to making 5 minute videos for YouTube.  For agencies it has been a breath of fresh air.  The 30 second spot since time immemorial has been a stick in the mud for advertising agencies, severely limiting both their creativity and  their enthusiasm.

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