{"id":18989,"date":"2016-11-18T16:16:32","date_gmt":"2016-11-18T21:16:32","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/google-preferred-from-cat-videos-to-premium-content\/"},"modified":"2016-11-18T16:17:06","modified_gmt":"2016-11-18T21:17:06","slug":"google-preferred-from-cat-videos-to-premium-content","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/google-preferred-from-cat-videos-to-premium-content\/","title":{"rendered":"\u201cGoogle Preferred\u201d: from Cat Videos to Premium Content"},"content":{"rendered":"

TV Advertising. We all enjoy it.\u00a0 Think about your favorite Super Bowl ad. Which one was it? Over the years, TV advertising has graced us with many great commercials and moments.<\/p>\n

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However, TV advertising dollars are rapidly going Digital. This year, for the first time ever, US Digital spend will exceed TV spending. By the end of the year, this digital spend will reach $72 Billion, while TV spend will grow to only $71 Billion [1]. And this gap will continue to get exponentially wider and wider in the future.<\/p>\n

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There are many reasons for Digital\u2019s success in capturing advertising market share (the growth of Mobile, the ability to bid on ads in real time, etc..), but today I instead want to focus on the biggest challenge facing online video Advertising, and how Google overcame it \u2013 to become the dominant player in online advertising.<\/p>\n

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The Online Advertising Challenge: Premium Inventory<\/u><\/strong><\/p>\n

Close your eyes and imagine you are the marketing executive for a large Retail Brand. I\u2019m serious, close your eyes and play along.<\/p>\n

How are you planning on spending your marketing budget? TV advertising probably comes to mind. But why TV? Well, there\u2019s the benefit of reach \u2013 you want people to actually see your ads, right? But \u201creach\u201d isn\u2019t the reason, if it was the reason, you\u2019d be quick to spend all your advertising dollars on YouTube, where almost 5 billion videos are watched on every single day, by nearly 1.3 Billion people [2].<\/p>\n

I\u2019ll cut to the chase: Advertisers have historically loved spending on TV because of their ability to show their ads on premium inventory. Remember that Super Bowl ad I asked you about earlier? Well, Super Bowl advertising is the cream of the crop of premium inventory.<\/p>\n

Up until 2014, there was no large scale way to get this kind of premium inventory online. And, up until 2014, TV advertising was still bigger than Digital\u2026but not for long.<\/p>\n

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Enter Google Preferred<\/u><\/strong><\/p>\n

In true Willy Shih fashion, I\u2019ll summarize \u201cGoogle Preferred\u201d in 25 words: Google Preferred allows advertisers to place their ads on the top 5% of YouTube inventory, for a slightly higher cost. \u00a0That was 20 words, not bad.<\/p>\n

With the launch of Google Preferred in 2014, advertisers now had the ability to show their ads exclusively on YouTube\u2019s most popular channels, along-side the hottest or viral videos of the time, and narrowly target their audience [3].<\/p>\n

While previously, if you wanted to run your ad on premium US inventory, your only option was to write a not-so-little $5M check for a 30-second Super Bowl ad [4], and hope that your target audience was watching. Now advertisers have more flexibility and control. They can divert that $5M check to YouTube, and hyper-target the most premium inventory in the digital space.<\/p>\n