DON GONYEA, HOST:
This is WEEKEND EDITION from NPR News. I'm Don Gonyea. Some news this week got us thinking about how radically our viewing habits are changing. The broadband service company, Sandvine, released a study that shows that Netflix and YouTube now account for more than half of the data we consume on fixed networks, which is to say at home or work. It's just one more bit of evidence that Americans are increasingly turning to online video sources for news and entertainment, rather than TV, which mean advertisers have to do the same.
To talk more about what advertisers are doing, we've called up Mike Shields, Adweek's digital editor. He joins us from our bureau in New York. Mike, welcome.
MIKE SHIELDS: Thank you.
GONYEA: So YouTube reigns supreme over Internet usage. What does that mean for advertisers who traditionally would have relied on television to find an audience?
SHIELDS: Well, it's interesting because for a lot of folks, let's say 35 or over, 40 or over, YouTube's a search engine for video. It's a place where you see viral videos. But for Millenials and younger, it's really like a primary form of entertainment. There are huge stars on YouTube who have massive followings. Kids and teens and tweens have subscribed to channels and have real relationships with these artists. And it's still a place where I think advertisers are reckoning with about how to advertise that environment.
On the flipside, every brand in the industry now is trying to become a publisher themselves and putting out YouTube videos. They're acting like media companies on YouTube.
GONYEA: And I've read that spending on online video advertising is expected to almost double just this year from last, to over $4 billion. What are the kind of ads that major companies are making for the YouTube audience?
SHIELDS: Really, right now the kind of ads you see on YouTube are repurposed TV ads. I mean, that's generally what brands have done. Everyone has always been crying out for advertisers to do something better, do something really over the Web and interactive. That's still, I would say, the exception right now. It's still mostly TV ads.
GONYEA: What's the risk in that?
SHIELDS: Well, the complaint you always hear is you're asking someone to sit through a 30-second ad running before a minute and a half of content. You know, the deal on TV is everybody complains about commercials but it's a pretty fair deal. You get a half-hour show, you get to watch maybe half a dozen commercials. The balance is kind of off when you're throwing TV spots in front of video content.
These brands spend, you know, half a million dollars on a TV spot. They don't necessarily inclined to do something unique for the Web. They want to get the most out of that and reuse it.
GONYEA: At some point it seems like they're going to have to flip that though.
SHIELDS: Yeah, I mean, these things take time. There's a lot of inertia in the television business. I mean, you're talking about Web video advertising doubling but, you know, the TV industry's still really healthy. It might also be like a generational change that has to happen, you know. The guys that control the dollars are still of a certain age and generation. Things have tended to move slow in this regard.
GONYEA: Let's go back to the experience of watching an ad on YouTube. We're going to play a clip of a ChapStick ad that we heard on YouTube this morning.
(SOUNDBITE OF CHAPSTICK AD)
GONYEA: That feels like one of those television ads.
SHIELDS: Well, the first thing I think of is someone's going to be reaching for the skip button really quick. That's the thing about YouTube. Google sells what they call true view ads on YouTube, which let you skip after a certain number of seconds. You know, there's people in the ad industry that think that's an impossible burden.
Even in a 30-second spot, some of these things have to build over time, right, so it's a very difficult bar.
GONYEA: I find myself watching that five-second countdown and not even looking at the ad.
SHIELDS: Yeah, I mean, that's tough. You know, you can train yourself on the Web to not pay attention to bad ads. People have gotten really good about that. And now with Web video, you train yourself to, like, OK, I'm watching a video; I'm gearing up to skip at soon as I can. I think that's why you're seeing a lot of brands saying, you know what? We're going to be content producers ourselves; play made-for-the-Web spots that are a minute or two minutes long.
They're not skipable because they are the content. You're going to have a new generation of creative artists that have to think a really different way for the YouTube world.
GONYEA: Mike Shields is the digital editor at Adweek. Thanks for joining us.
SHIELDS: Thank you. Transcript provided by NPR, Copyright NPR.