YouTube is Australia’s most profitable video company. It wants even more TV dollars

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Welcome to an end of week update. Today: First thoughts on last night’s annual YouTube Brandcast extravaganza for advertisers, and new market lows for IVE Group and Southern Cross Austereo.

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YouTube has eaten the TV industry’s breakfast and lunch. Tonight it will be eating its dinner

Google boss Mel Silva pushes for traditional TV dollars

Tim Burrowes writes:

Eight days after Nine’s upfronts, it was back to Sydney’s Hordern Pavilion to hear from the company doing more than most to put Australia’s television networks out of business. It was the turn of the YouTube Brandcast event.

At some point in the last year or two, YouTube, owned by Google, became Australia’s biggest TV company by revenue, pulling in more than $1.5bn locally. By comparison, the biggest of the traditional players, Nine, brought in $1.25bn in television revenue across linear and digital in the last financial year.

With average viewing audiences falling faster (by 10-20% a year, depending how you analyses the numbers) than they can make up the shortfall in streaming, the TV networks have reached their most challenging moment.

All of TV’s foes smell blood in the water.

A scripted message at News Corp’s D_Coded event in March this year was that the company wanted dollars from television budgets. Cathy O’Connor, CEO of Ooh Media, made the same argument in August, pushing for TV dollars to shift to outdoor.

And last night, YouTube was just as overt, putting on stage marketers who have already made the budgetary shift.

Ritson, De Lullo and Barlow discussed their shifts away from TV

It’s not unusual for an upfronts event to include a quick client testimonial, usually on video. Last night, YouTube went further, with a substantial part of proceedings dedicated to an onstage discussion with two marketers who have already pulled budgets out of linear television in favour of YouTube - Kathy De Lullo from Mondelēz and Lucinda Barlow of Uber.

The mini panel, led by marketing professor Mark Ritson, drilled into tests conducted by both brands. De Lullo talked about shifting Cadbury’s Christmas spend into YouTube, which she said outperformed television and grew market share. And Barlow (former boss of marketing at Google, so very much a friend of the family) testified that the numbers delivered for Uber’s Get Almost Anything campaign were good enough to replicate the strategy in other markets.

Incidentally, a terrific new Uber delivery campaign, made by Special Group, dropped this morning.

The pacing of the event was less hectic than a traditional TV upfront. Mainly that was a function of there being no new slate of commissioned content to announce. The content comes, of course, from the creators, not from the platform.

Instead, the advertising announcements were iterations: the ability to put 30 second unskippable ads in front of content on connected televisions; more advertising integration into the Shorts feed; the ability to place ads when content is paused. If somebody had told me those features already existed, I wouldn’t have been surprised.

The TV industry is pushing back. I’m sure the timing was no coincidence that The Sydney Morning Herald and the Age, owned by Nine, ran a piece last week featuring anonymous sources claiming YouTube users often get served ads irrelevant to their interests. Much like television, it has to be said.

It is, however, a legitimate complaint that there is no third party overview of YouTube’s advertising ecosystem.

And TV is fighting on multiple fronts. The Australian Financial Review reveals today that Amazon is seeking to place a 30% tax on ads that run via its Fire TV device. Although Fire has a small share of the viewing market, it’s a dangerous precedent if other TV manufacturers follow.

Upfronts season rolls on. Today it’s the turn of Australia’s last major magazine company, Are Media, seeking to position itself as an ecommerce player. I’ll report back in tomorrow’s Best of the Week.

Upfronts are always big and glitzy. Nine's was consequential too

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IVE back below $300m as SCA hits another low

Printing and marketing group IVE saw its market capitalisation fall back below $300m for the first time in more than a year yesterday.

IVE’s share price fell by 3.78%, taking it down to $1.91 and a market cap of $294m, its lowest point since July 2022.

Meanwhile, the overall Unmade Index recovered slightly yesterday with a 0.45% increase to 619.5 points.

Enero Group led the board yesterday with a 5.32% increase in share price.

Seven West Media came in second with a 1.64% improvement, while Nine followed with a 1.50% lift.

Domain fell 1.79% and Southern Cross Austereo dropped 1.39%, taking it to yet another new low point.

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Time to leave you to your Friday. We’ll be back with BOTW in the morning. I’ll be squeezing in this afternoon’s Are Media Ignite event and a flight home to Tasmania before then.

Have a great day.

Toodlepip…

Tim Burrowes

Publisher - Unmade

tim@unmade.media

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