Google’s $100 Million Ad Deal with Publicis Is an Important Step for Online Video

/ Nov 15, 2013

Pub

One of the biggest criticisms against the Digital Content Newfronts is that the annual advertiser extravaganza hasn’t done much to do what it’s actually intended to do, which is to help move TV ad budgets to online video.

Is that a fair criticism? I think you can find a lot of smart people who would say yes, and as many smart people who would say no. Which is to say, it’s online video, we’re all still trying to figure it out!

But here’s something both TV execs and digital media execs should be (and probably are) paying a lot of attention to — Ad Age reported yesterday that Publicis Groupe agencies DigitasLBi and Razorfish have committed to buy more than $100 million worth of Google inventory across platforms in 2014. This includes inventory available via Google’s display and mobile ad networks, as well as space on Google+ and, most importantly, YouTube.

In fact, according to the report, part of the deal includes Digitas and Razorfish working with YouTube to create custom branded content for the site.

Is this the beginning of the Big Shift, when piles of TV ad dollars finally move to online video? The safe answer is no. CBS, by all accounts the biggest television broadcaster, secured upfront commitments this year to the tune of $2.5-2.75 billion dollars — virtually the same amount it secured in 2012. Among the other major broadcast networks, ABC pulled in an estimated $2.5 billion, while NBC locked up $1.8 billion.

Not to mention, Digitas is arguably the biggest champion (from the agency world) of web video, being the original mastermind behind the Digital Content Newfronts. Not exactly the toughest of sells.

So Google/YouTube, by all accounts the biggest video advertising platform on the web*, still has a long way to go if it wants to convince agencies to open up their checkbooks.

But $100 million isn’t exactly pocket change. And as recently as a few months ago, there was chatter among industry sources that YouTube had trouble locking down ad commitments following its most recent Brandcast event in May. With this deal, it’s clear that the relationship between advertisers and YouTube has changed, or at least is beginning to change.

Some of this could be attributed to Google finally willing to play ball with TV buyers in a way that they’re used to. The framework of Google’s deal with Digitas and Razorfish mimic what you see in TV-upfront commitments — buying in bulk, at a discounted rate, at scale. Google also recently invited Nielsen, TV’s chosen supplier of audience measurement and ratings, to insert OCR tags on YouTube ads.

And to be fair, there isn’t a shortage of research studies disclosing that, yes, ad dollars are expected to migrate to web video. A recent study from Adap.tv found that online video was pulling ad dollars from multiple budgets including those dedicated to broadcast TV. Meanwhile an earlier survey from the Interactive Advertising Bureau found that 70% of buyers who attended the 2013 Newfronts expect TV dollars to move to digital in the coming year.

So really, it’s even safer to say the Big Shift is happening, but it will take a while, and it’s likely that Google/YouTube will lead the way.

* Not including the two previous months, during which, according to comScore, AOL was the biggest video ad player in the US.

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