Wild West of online metrics: the new war on YouTube

Controversy over how social video networks measure views and charge advertisers highlights TV’s unparalleled scale.

Viewers versus views.

Mounting controversy over how social video networks like YouTube measure views and charge advertises highlights television’s unparalleled scale, writes Darren Davidson.

Seven Network’s My Kitchen Rules attracts more live viewing minutes than the entire YouTube network in Australia, according to an analysis by The Australian.

The popular cooking game show generated 3.2 billion live minutes in April, beating the reigning king of web video by 200,000 minutes.

This means one single TV show on Seven is worth more to an advertiser than an entire month of YouTube.

By its own standard of audience measurement, YouTube can’t hold a candle to how people are consuming TV via a fixed screen at home and new forms of viewing such as catch-up services and apps.

That’s the stunning conclusion reached by an analysis of Australia’s main commercial networks by applying YouTube’s average-viewers-per-minute metric to find out how the Google platform would rank as a TV program using an apples-to-apples comparison.

Contrary to traditional TV’s much-hyped demise, our analysis shows total viewing minutes ­generated by individual programs on Australia’s three main commercial networks dwarf YouTube’s total local audience when expressed in viewed minutes.

Total minutes consumed across every single YouTube video in April (three billion) only narrowly beat the Seven News and Nine News nightly bulletins, with 2.7 billion and 2.5 billion ­respectively in April. Combined, free-to-air TV and pay-TV audiences produced 126 billion minutes in April, reaching 23.4 million individuals compared with three billion minutes and 14.9 million individuals at YouTube.

Seven Network alone overshadows YouTube, with 29 billion monthly minutes and 20.3 million individuals, showing that it cannot match the No 1 rated FTA network in terms of engagement and scale. Yet, YouTube chief executive Susan Wojcicki claimed last month during a presentation to American advertisers that it now reaches more 18 to 49-year-olds on mobile devices than any TV network, reinforcing a concerted effort to siphon off TV advertising spending in Australia.

A day before Wojcicki’s bold pitch, Magna Global, the ad buying arm of Interpublic Group, signed an upfront advertising deal with YouTube, shifting spending from TV ads and budgets allo­cated to print.

Magna, which buys ad time on behalf of clients such as Coca-Cola, committed to spend at least $US250 million ($339m) ­between October 2016 and ­Decem­ber 2017 on Google Preferred, a product offering a premium pool of ad space on YouTube.

However, as online advertising has grown, so have concerns about wild west viewer measurement of fundamentals such as how many people watch a YouTube video versus a TV advertisement.

TV viewing is typically quantified by viewers live or within seven days and online video by highest views. There are huge ­differences between these two metrics, which are being overlooked in media’s rush to short-form video.

Whenever anyone in the sample is in front of a TV set, their viewing habits are recorded and aggregated. With online video, the definition of a view is typically any request made to a server to play a piece of video.

This means there is no agreed measurement of what constitutes a view, and a view could be as little as a ­millisecond.

Based on these calculations, YouTube’s prices can look even higher than prime time TV.

Commercials on YouTube can cost ­between $13.50 and $20 per thousand people reached in key ­demographics. Those prices are higher than the average for advertisements on TV networks, which can cost ­closer to $10.

Prompted by YouTube’s quest for TV ad dollars, the FTA networks have signed a historic pact with pay-TV operator Foxtel, burying years of bitter infighting to fight back against the US giants.

Think TV, a marketing and ­research body backed more than $5 million in joint annual funding, will launch next month under a soon-to-be-appointed new chief executive. Ten executive Russel Howcroft chairs the organisation.

The question facing Australian networks and advertisers is whether this year’s improved US upfront season — Seven chief Tim Worner recently noted that the US TV ad market was red hot — is indicative of a longer-term market correction, with ad dollars moving back to TV from digital.

Henry Tajer, the New York-based Australian media executive recently named as the global chief executive of IPG Mediabrands, still has plenty of confidence in a business model that has held firm for decades.

“The underlying ­reality of TV in the US is that it is relatively ­stable,” Mr Tajer said. “This year ­includes the Olympics on ­NBCUniversal together with the US presidential election. These two events alone will add about $US3 (billion) to $US3.5bn into TV in the US. Most of that going to local TV.”

Jonathan Barnard, Zenith­Optimedia’s London-based global head of forecasting, believes the US upfronts are more likely to ­indicate that TV will “lose market share more slowly than expected than reverse the decline entirely”.

Still, both executives believe there are “legitimate reasons” to be wary of digital advertising, pointing to questions about online ad viewability.

Mr Tajer said IPG had been proactive in “managing our clients’ investment in digital channels with caution and safeguards”, deploying anti-fraud, verification technology, and anti-bot measures to ensure marketing campaigns are seen by real humans and don’t fall prey to fake online traffic.

These problems are becoming a daunting issue for agencies, publishers and brands alike, according to Mr Barnard.

“Advertisers need to be aware of the problems of viewability and fraud in which ads they pay for are not seen by real consumers,” he said.

But there are no such issues with TV, said Mr Howcroft, who said TV was a “safer, more established place for brands” to appor­tion budgets than online.

Even with TV ratings coming under pressure in a fragmenting media sector, brands are finding that replacing TV carries significant risks.