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Pete Borum

Why YouTube Red Is Good for Branded Content

Pete Borum
Why YouTube Red Is Good for Branded Content

When it comes to delivering content in a selfless and user-friendly fashion, YouTube carries the torch. Though supported by ads, the service is provided free of charge and allows ad-averse users to skip most commercials after just five seconds of watching them.

Now, with the launch of YouTube Red, people who can’t even stand watching a few seconds of commercials have the ability to pay a small fee and avoid them altogether. Offering an ad-free option is YouTube’s way of showing its users that it cares about them — while also smartly opening up a new stream of revenue for the site.

Further, there will still be plenty of users who elect not to purchase YouTube Red. This means YouTube can continue sending (and perhaps increasing the amount of) advertisements their way — while dangling YouTube Red as an escape hatch for those who aren’t satisfied.

The Ad-Free Anxiety Effect

As with any ad-free invention, the marketing community isn’t all too excited about the launch of YouTube Red — and YouTube’s content creators aren’t exactly jumping for joy, either. Both of these parties take their money very seriously and generally don’t embrace change.

In reality, though, advertisers are losing an audience that wasn’t even listening to begin with. And if YouTube plays its cards right, I believe content creators will actually benefit from YouTube Red.

YouTube’s algorithm has long favored watch time over total views, which sends a message to creators that it’s more important to produce great content than click bait. Accounts with high watch times receive more promotion from the site, get more ads served, and thus receive more compensation.

Even with a growing ad-free user base, YouTube will continue to serve plenty of ads — and with the additional money coming in from Red subscriptions, there will be more revenue to divvy up among creators who produce great content.

Brands, on the other hand, are being forced to embrace a new strategy that’s been on the horizon for quite some time.

Building Brands Without Ads

Before this change, a marketer only had five seconds to fit enough content into an ad that was inevitably going to be skipped. Now, with those five seconds in jeopardy, it’s more important than ever for brands to seek out specific audiences, seamlessly integrate their messages, and display how they can add value to audience members’ lives.

This is a major departure from traditional television marketing, where brands threw money into certain time slots and programs with hopes that their loud, self-centered, interruptive ads wouldn’t fall victim to the DVR and somehow reach the right eyes. YouTube is ushering in an era where brands must stop pushing messages of “me, me, me” and begin showing how they can benefit “you, you, you.”

Renowned salesman Zig Ziglar said it best: “You can have everything in life you want if you will just help enough other people get what they want.” On the surface, this may seem counter-intuitive. But in our current climate, showing that you’re selfless is actually the most self-interested thing that you can do. Selfish ads are being ignored by modern consumers, but selfless brands inspire loyalty and patronage.

This won’t be an easy shift — especially for large companies that have been producing self-centered advertising narratives since the dawn of time. But soon, these brands won’t have any choice but to adapt.

YouTube (along with Facebook, The Walt Disney Company, and others) is already focused on spherical video content in virtual reality as the future of media. In-stream advertising is becoming the new norm across television, internet, and radio — and brands who don’t embrace this fact will eventually find themselves talking to the wall.

It’s vital for marketers to respond to our ad-free world by creating informative, educational, and entertaining content that makes viewers feel good about themselves. Commercials should no longer tell people what they want. The dynamic has flipped, and if your company is not prepared to capitalize on it, your competitors certainly will.

Pete Borum is the co-founder and CEO of Reelio, where he oversees the business, creative, and engineering teams that power some of YouTube's most effective branded content partnerships. Reelio's proprietary technology analyzes social data to identify the ideal YouTube partners for any audience, and then automates every aspect of working with them. You can reach Pete at pete@reelio.com.

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