TV Commercials vs YouTube Ads Explained

TV Commercials Vs YouTube Ads Explained



How You Can Take Advantage of the Disruption in Advertising

When I worked at Fox Entertainment in LA, I was able to talk to several executives and leaders in the television industry.  They were worried of the future because of the massive disruptions that’s been going on in advertising.  Believe it or not, advertisers are willing to pay big money for your attention.  TV stations make billions of dollars by renting out your attention to advertisers.  When you watch the Bachelor, Breaking Bad, the Walking Dead or (Insert your favorite TV show here) These TV stations sell your attention to advertisers through commercials.  So when you start fast forwarding the commercials, the TV stations no longer have your attention, thus making the advertisers’ commercials worthless.

Our attention has been transferring from TV to YouTube.  YouTube is doing to TV what TV did to the radio.  Slowly killing it.  I’m not saying that YouTube is replacing TV because there will always be a need for it.  Even radio is still around and has it’s place.  But the value that TV brings to consumers and advertisers is decreasing.

Their problem is our opportunity.

Internet vs TV

Gone are the days of forced advertising watching and seeing ads that we don’t want to see.  The tables of power have turned from the advertisers to consumers.

TrueView (YouTube) advertising allows consumers to skip an ad if they’re not interested.  It also allows advertisers the ability to hyper target their ads at an affordable price.

The billions of dollars that are being so carelessly spent on TV will inevitably flow to YouTube.

Everything that YouTube ads are, is everything TV commercials aren’t; Engaging, Targeted, Affordable, Trackable, Relevant and the Future.  The ability to hyper target an audience in Trueview is unreal.  For example, anyone can create an ad that… Old Media Vs New Media

  • Targets males,
  • Are 25 years old
  • Interested in technology
  • Who use an iPhone
  • Live in San Francisco

To top it off you, the advertiser only pays if the viewer watches half of the ad or 30 seconds.  Whichever comes first.  It’s performance based advertising.  No longer a shot in the dark hoping to hit something.

The analytics learned from the advertising campaign is just as amazing as the targeting ability.  Advertisers can know…

  • Number of times the Ad was played TrueView In Stream
  • Number of times the Ad was clicked
  • Where the Ad was shown
  • When the Ad was shown
  • How much of the Ad was viewed
  • If a product was purchased afterwards
  • What the Cost Per View is
  • What’s the conversion rate
  • What’s the Cost Per Conversion / Customer Acquisition

 Compare this to the TV Model.  Give us $200,000 and we estimate that your message will be shown in 500,000 households.  Whether people actually watched your Ad we don’t know.  They may be in another room when it airs.  We also don’t know if the viewers actually did anything after the commercial.  Did they drive to a store and purchased your product? Probably not.

There’s so much valuable data gained in online advertising that just isn’t possible with old media (TV, Print, etc)

YouTube and the Wild WestFor this reason, I’ve been calling YouTube the Wild West for a while now.  It’s new online real estate that is high in demand but low in supply.

The CPV (Cost Per View) in YouTube is now where the CPC (Cost Per Click) in Search was 10 years ago.  Low cost real estate that will grow by 1,000% in the next 5 years.  Since Google owns YouTube this is all done in the Adwords platform.

Think of the massive dent that Google has placed in the universe in the last ten years.  What Google will accomplish in the next ten years will make this dent look like a small scratch.


Do you agree or disagree?  Do you think YouTube will take out TV commercials? Why?  I’d love to hear your thoughts.  Especially if you disagree.  Please voice your opinion in the comments below…

Comments 13

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  7. Hi Jake. You make a really good point. I’m portuguese and I see that the adds on television are staying back, I think that what’s happening is that almost anyone sees television. Nowadays we have everything online, I recently saw a study that said that 60% of portuguese television is seen by the elderly’s. Well, if I’m selling technology I won’t put an ad on TV, it will probably be a huge waste of money and it’s like you said, on Youtube I can direct my advertising to who I want, I can rate who have seen it, it’s really the future.
    But I don’t think that we have to restrain this kind of advertising to the ones that are shown before the video that we really want to watch. You, as a user, regularly are looking for that ad that a friend talked to you about, or that you’d seen the other day and you thought that was amazing and want to see it again.
    I think that Youtube will change the way as we see advertising, because it doesn’t imposes nothing to you, you see what you want.
    The only thing that marketeers and advertisers have to do is adapt their ideas and storytelling to this knew online generation.
    So, I agree with you. Youtube is the future of advertising.

  8. This is a YouTube,Google Marketing course ………for SuperHeros. Thank you for the Videos I look forward to implementing these techniques into my campaigns.

  9. Hi Jake,
    I totally agree.
    I used to advertise my products on TV.
    Sometimes we hit a home run and made a ton of money.
    Other times we would bomb and lose a bunch of money.

    I could never pinpoint the reasons for each because TV advertising offers very little in the way of useable “analytic” information.

    The info the networks give you is practically worthless.

    In the end, I had to quit advertising on TV because I couldn’t figure a formula to get a “consistent” ROI.

    Take care and good luck with your new Youtube advertising course. I’ll check it out once you have it ready to go.

    Larry Trocha

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