The first step in breaking down complex news items into digestible and interesting stories is to first understand them yourself. That being said, this issue of brand monetization and advertising revenue for YouTube is kind of a doozy.
As part of the NewFronts dealings going down for YouTube today, the Wall Street Journal is raising the question of YouTube’s ad share and how it conflicts with the aims of top MCNs and their own branding needs. See? Thorny stuff.
YouTube, according to the WSJ, takes 45 percent of ad revenue generated by those ads that play out before videos, but it leaves brand integration money on the table by allowing MCNs like Maker, StyleHaul and Fullscreen to craft their own deals. Brand integrations are like the video that Maker worked out for Mike Tompkins to do with Pepsi (below) — the money made by featuring products in YouTube videos. The question is: how long is YouTube going to let that go on without cutting themselves a slice? From the WSJ’s perspective, apparently the salad days are over.
“This issue is on everybody’s radar right now,” said a WSJ version of Deep Throat. “The YouTube sales team has basically been selling programmatic pre-roll, which cuts across channels. And MCNs [multi channel networks like Maker] want to sell their own inventory.”
YouTube’s idea so far has been to pitch an idea of the top MCNs co-selling brand deals in conjunction with YouTube, but that slope is seen as a slippery one for the MCNs who A. like the current arrangement and B. don’t trust that YouTube will have their best interests and most suitable brands at heart.
Not to cannibalize those “poor bastards” at the WSJ too much, but this very telling quote from Stephanie Horbaczewski, CEO of StyleHaul would look very pretty here at the bottom of this article: “I don’t think they could ever do what we do,” said Stephanie. And apparently, to raise the stakes, CEO George Strompolos of FullScreen concurred with that assessment.
Well then. Game on, YouTube.
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