YouTube recently announced it will spend $200M marketing its $100M worth of original content. They announced it at their YouTube Brandcast event, in an effort to convince brands that YouTube is a good place to spend their advertising dollars.
Their $100M went out to two groups, Hollywood and YouTubers, and these new channels have been slowly rolling out since January. The marketing spend surprised some, but is roughly in line with Hollywood movie budgeting, where film studios spend about as much on P&A (prints and advertising) as they do on production.
This is very different from how many brands and independent filmmakers spend their dollars. In each of these camps, most spend money on production and hope to go “viral” — but the chance of being seen by millions without any marketing behind your video are near zero.
I recently had a great meeting with Pixability where they were showing off their new (and very impressive) analytics tools. Their data shows that 45% of videos published by companies get less than 1000 views. With no marketing behind them, videos are not worth the price of production. But if you are willing to spend a bit on creative social media and other marketing, video can be worth far more than you spend creating it.
BMW’s The Hire series brought them a 12% sales increase; Degree antiperspirant’s The Rookie series brought them a 22% sales increase; Blendtec’s Will It Blend videos brought them a 500% sales increase; and there are many other stories like these.
The best story is Red Bull — their extreme sports content is so popular that they make more money from other advertisers advertising against their content than they spend creating the content. Their content is a profit center.
The moral of the story? Don’t create video for the sake of having video. Don’t keep up with the Joneses — be at the cutting edge. Create great content (crowdsource through us to get lots of options for a great price), and save some of your budget for a smart marketing campaign.