YouTube Offers Audience Guarantees to Lure Advertisers From TV Networks

YouTube hopes to alleviate advertisers' concerns about an oversupply of video inventory on the Web and finding quality programming.

YouTube is agreeing to concessions sought by advertisers in its efforts to increase ad dollars and compete with television networks that reimburse marketers with extra ad time when viewership falls below target expectations.

People familiar with the matter told The Wall Street Journal that advertisers making advance commitments will receive guaranteed ad space across high performing YouTube channels, which will enable marketers to reach certain target audience percentages.

Marketing executives will “feel more comfortable about moving ad budgets that weren’t earmarked for YouTube or online video to Google,” Jordan Bitterman, chief strategy officer of Mindshare, told the WSJ.

YouTube hopes to alleviate marketers’ concerns about an oversupply of video inventory on the Web and finding quality programming. While advertisers traditionally make advance commitments to television networks they have been reluctant to do the same with YouTube, in part because of Google’s requirement that ad buyers use Google’s audience measures.

As the WSJ reports, “online video companies are particularly eager to strike advance commitments now, before advertisers commit the biggest portion of their budgets on traditional TV networks during the upfront, which starts in May.” The increase in online video comes from budgets that previously went to online display and print media.

YouTube’s change in tactics is part of an overall strategy that includes targeting marketers who buy ad space on cable channels. Last November, Google adopted TV-like audience measures that allow marketers to make clean comparisons with traditional TV.

While buyers and marketers applaud YouTube’s concessions, ad executives told the WSJ that some aren’t completely satisfied and would like to see more TV-like deal terms, including the flexibility to pull back some of their ad commitment later.