Earning and Owning Youtube by VideoInk Editorial

EARNING AND OWNING YOUTUBE A Guide to Best-in-Class Brands in Auto, Beauty/Luxury, CPG, and Gaming

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Contents

Welcome Letter from Tubular Labs A Guide to Best-in-Class Brands in Automotive

Brand Category - Auto

Brand Category - Beauty / Luxury

Brand Category - CPG

Brand Category - Gaming

Closing Summary Letters from our partners - gova + 212 NYC

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About VideoInk

Tubular Labs Intro Letter

ur mission at Tubular Labs is to empower those who are creating the future of video to entertain and inform as large and engaged audiences as possible. We partner with leading consumer and B2B brands who understand content creation, audience development, and marketing, but are still largely flying blind when it comes to YouTube because the landscape is so vast and the audience is so fragmented online. For these leaders, we make sense of the digital video landscape so they can make (and execute!) smarter business decisions about identifying, growing, and engaging their audiences on YouTube. Our proprietary Tubular Video Intelligence gives brands, agencies, and creators real-time actionable insights that empower them to track, measure, and understand their brand presence on YouTube. And we don’t just give you data on views, we dive deeper and deliver demographic, engagement, competitive, and category-specific insights to make brands successful in the digital video space. All data is from Tubular Lab’s proprietary AudienceGraph, which analyzes 160 million video fans, their content preferences and their behaviors from 10 billion social engagements. And our Brand Intelligence Dashboard is the first platform that includes every brand, full historical data for that brand, and real-time trends that are filterable by topic. Tubular has taken online video analytics to an entirely new level. For Earning and Owning YouTube, Tubular Labs looked at YouTube video intelligence from September 2013 through September 2014 to get a 365-day snapshot of brand performance on the platform. We focused on the most popular brand categories defined by number of videos uploaded as that it is a determining factor in that brand’s YouTube marketing efforts. The brand categories that are featured in this report are the most active on YouTube: Automotive; Beauty and Luxury; Consumer Packaged Goods; and Gaming. Working with Videoink to mine and synthesize the data for key brand categories on YouTube was an exciting opportunity for us to share our proprietary intelligence and depth of brand knowledge with actionable analytics that make a difference in how brands do business. We wanted to share our learnings with brands who are just getting into the digital video game, or have been at it a while. Our intelligence and marketing software offer you the keys to success in a very crowded and competitive landscape. Don’t just take my word for it; more than 2,800 of the most sophisticated creators, brands, and the media companies trust Tubular software and professional services to build engaged online video audiences. To date, Tubular Labs users collectively reach more than 350 million YouTube subscribers, deliver over three billion monthly views, and grow their audiences 56% faster than non-users. Enjoy. Regards, Rob Gabel CEO, Tubular Labs

A Guide to Best-in-Class Brands in Auto, Beauty, CPG, and Gaming

t’s no secret that YouTube has changed how people consume video content. Thanks to its direct and interactive nature, watching a video on the world’s biggest video site is not usually a passive experience. The result is an ecosystem that is thriving on new content models and a completely different relationship between the content provider and the consumer. For brands and agencies, this has largely been a troublesome issue. Decades of doing things a certain way has made it difficult for brands to embrace the change that’s confronting them. Relatively speaking, YouTube -- and online video in general -- is new and and unproven. But if audiences are already migrating to screens that are not tied down to a cable line, so must those who want to sell things to them. Granted, some advertisers are already adapting to the change. Others are not. It’s with that simple idea that VideoInk and Tubular Labs, a video analytics and marketing intelligence platform, decided to take a closer look at the top consumer brands on YouTube. Among the biggest spenders in traditional media -- from television to print and radio -- how are some of the brands faring when it comes to YouTube? By measuring and analyzing these brands’ performances, we hoped to determine why some brands were succeeding, why others weren’t, and what that indicates for any advertiser hoping to take advantage of the immense opportunity available via the YouTube ecosystem. What we learned, as you will see, is that while success varies among the top brands, those who are doing better are those who have welcomed YouTube as a unique platform that requires unique strategies.

Auto

n YouTube, automotive is not a top-10 content category. According to Tubular Labs data, among channels with at least 250 subscribers, only 1.8% (roughly 38,000) are automotive-related, good for 12th behind everything from the dual giants of music and gaming, to education, sports, and comedy.

Earned and Owned When ranked by earned media, the top five auto brands on YouTube are Toyota, BMW, Honda, Ford, and Porsche. At face value, the numbers look good. Hundreds of millions of earned-media views suggest a brand is creating compelling products and messaging that people want to watch and share

Top 5 gaming brands earned youtube statistics on uploads in the last year Owned Earned But engagement is 5not upbrands to par. Theyoutube top five automotive brands averaged a 0.835% engagement Top 5gaming gaming brands earned youtube Engagements Top earned Engagements statisticson onuploads uploads theThat’s lastyear year statistics ininthe last rate across all earned-media views. below the 1% threshold Tubular defines as the benchOwned Owned Engagements Engagements

Earned Earned Engagements Engagements

mark for a brand to be doing “well” on YouTube -- and remember, this is for content that a channel unaffiliated with the brand felt was compelling enough to share. Owned Views

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Unfortunately, viewership and engagement numbers for each brand’s owned channels present a similar story. In fact, as you can see in the graph, the top five looks almost exactly the same.

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Because the owned media numbers are even worse. Combined, Toyota, Ford, Honda, BMW, and Porsche averaged a 0.151% engagement rate across all owned media. To say that doesn’t even register would be an understatement. Of the five, Porsche boasts the best engagement rate -- at 0.61%.

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To be fair, at least compared to the top five gaming brands, the top auto manufacturers are better at publishing content to YouTube, with Ford the most prolific at 2,770 videos since last September. Of Ford Ford the other four, three -- Toyota, Honda, and BMW -- all published more than 1,100 videos in the same time frame. (Porsche sits in the back with only 275 videos.)

But as you’ll see later in this section, simply publishing videos is not the same as having a strong and successful YouTube strategy. 6

Who’s Watching The automotive category on YouTube leans heavily toward young, male viewers. The biggest age demographic watching content on any of the channels were young men aged 18-24. They accounted for 47% of total viewership on Toyota’s top channel, 47% again on the BMW channel, 39% on the Honda channel, and 49% on the Ford channel.

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Porsche’s top channel was the only outlier, with men aged 25-34 accounting for 36% of its viewership, besting the younger 18-24 demographic by 1%. Geographically, the United States and Germany were the top two markets when measured by which countries all official brand auto channels originated from. That isn’t surprising; two of the brands, BMW and Porsche, are built by German companies, and the remaining three are near-ubiquitous in the US. In fact, in August 2014, Ford, Toyota, and Honda were three of the four best-selling brands in the US. [1]

What Are They Watching When assessing the content available across the five most popular channels from the five top automotive brands, it begins to make sense why BMW and Porsche boast better owned-media engagement rates, even if the category doesn’t score well overall. More than a decade ago, BMW debuted the landmark BMW Films series, which distributed numerous online short films and series shot by major Hollywood directors. While the company announced earlier this year that it plans to resurrect the BMW Films banner [2], vestiges of its initial effort can still be found on its main YouTube channel. Yes, the BMW channel has plenty of the usual stuff -- repurposed TV commercials and trailers and tutorials of various car models and features. But it also offer series such as “BMW Stories,” which spotlight customers and their cars, and “BMW History,” which explores the history of the luxury car brand. There is at least the appearance of an effort made by BMW to entertain and engage with consumers via YouTube, and it’s reflected in the stats.

This is unlike Toyota, which had more than double the number of owned media views BMW had since last September, but less than half the number of engagements. Scanning the ToyotaUSA channel, it’s almost entirely comprised of repurposed TV spots, car trailers, and how-to videos. Granted, it can be argued that the YouTube effort reflects the brand -- BMW is the “ultimate driving machine” while Toyota says “let’s go places”; one offers an experience, another gets you from point A to B. And yet, Toyota did lead the category in both earned and owned media in the past year. But Toyota was also one of the top-10 advertisers in the US during the first two quarters of 2014, which combined with the company’s relatively low engagement rate, indicates that a lot of the viewership came as a result of paid-media campaigns. Similar to BMW, Porsche also posts a (relatively) high engagement rate at 0.61%. Currently, the company is rolling out a series on the channel called “911 Secrets,” which reveals secret Porsche 911 models in honor of the car’s 50th anniversary. As part of the campaign, Porsche is encouraging users to answer questions about the “myth of the Porsche 911” to prove their expertise. By its very nature, the campaign encourages interaction. This all points to the biggest issue with the top auto brands on YouTube: they are all creating content -- some of it is even compelling -- but most of it is not meant for YouTube. It’s incredibly difficult to achieve superior engagement on YouTube, if the platform is mainly used to archive pre-existing footage. The overall viewership numbers are certainly there. But if views are high, and engagement is low, then the data suggests that most of these views came as a -- direct or indirect -- result of paid media campaigns run by the advertiser. Simply put, if brands promote a particular TV ad on YouTube, it will generate views; if the ad is compelling, users will be compelled to share it on their own channels, and it will generate even more earned views. But that’s as far as the engagement will go. This is why the most interesting brand might be Honda, which recently launched its $50 million “Honda Stage” project as part of a larger strategy to move dollars from cable to digital. The brand has partnered with iHeartMedia (formerly Clear Channel), Live Nation, Revolt TV, and Vevo to produce and distribute branded music content. The early returns are tepid -- 430,000 total views since the official Honda Stage channel launched in late May. But if Honda maintains its investment, the brand could join the likes of Red Bull and GoPro as YouTube branded content stalwarts. And here’s why: When removing the one unlisted video[5], which looks to be a standard ad, on the official Honda Stage channel, the channel has a 1.4% engagement rate. With the ad included, the engagement rate on the channel is 0.42%. [1] Website: http://www.goodcarbadcar.net/search/label/US%20Auto%20Sales%20By%20Brand?max-results=5 [2] AdAge: http://adage.com/article/news/bmw-bring-back-bmw-films/291710/ [3] YouTube Video: https://www.youtube.com/user/Porsche/911secrets [4]Billboard.com: http://www.billboard.com/biz/articles/news/branding/6114206/honda-pouring-over-50-millionad-dollars-into-new-music-platform [5] YouTube Video: https://www.youtube.com/watch?v=AP5PKCJ1A8E

Beauty

eauty is one of the most intriguing content categories on YouTube, because it’s changing the way billion-dollar brands are selling everything from acne and anti-aging creams, to nail polish, mascara, and even deodorant. [1] Despite previous perceptions that the primary demographic on YouTube was young males, over the last couple years, the female demographic has become well represented on the platform. In fact, beauty on YouTube is booming, especially amongst ages 18-24, which account for over 63% of the viewership[1] but despite the remarkable numbers, the beauty/fashion and luxury (“BFL”) categories account for 6.6 billion views over the last 365 days, a whopping 75 billion fewer than gaming on YouTube, according to Tubular Labs data. With those numbers, beauty and fashion sits as the 16th category on YouTube while beauty, fashion and luxury together represent only 4.5% of all channels on the platform. According to a recent eMarketer study[2], net YouTube ad revenues are expected to climb 40% in 2014 in the United States to over $1 billion and if revenue distribution is proportionate to the volume of BFL categories on the platform, YouTube could expect nearly $45 million in ad revenues tied to beauty/fashion and luxury channels. Largely, outside of luxury, which is stronger in owned viewership (see below section on earned and owned media), beauty/fashion brands have better earned footprints on YouTube than their on their own channels -- altogether, the aforementioned top five brands have 11X more earned views than owned. This data is somewhat correlated to the extreme volume of videos produced by fans and creators in comparison to the somewhat meager upload rate of brands to their own channels. The primary challenge facing brands building their own presence on YouTube is the difficulty in matching the genuineness that YouTube content creators bring to their audiences. But, looking toward the future, it’s clear that brands will continue to invest in YouTube — particularly with content creators that can give them instant likeability and credibility at scale.

Earned and Owned Surprisingly, vloggers and YouTube viewers don’t discriminate when it comes to the price point of products they haul and it’s quite common for a creator to”haul” products from common convenient stores like CVS or Target. So when it comes to the brands with the biggest earned footprint on YouTube in beauty and fashion, Maybelline and NYX sit at second and third, accounting for over 1.05 billion views and over 44 million engagements[2] collectively behind high-end cosmetics line, M.A.C, which racked up 715.3 million views and 32 million engagements alone in the same year. M.A.C also saw over 7X the earned viewership than Chanel, the top-performing luxury brand in terms of earned media with over 10.5 million views over the last year. When looking at performance across owned and earned, luxury-specific brands Chanel, Louis Vuitton, and Armani had disparate view counts between earned and owned -- views on their own channels account for roughly 5X their earned views on YouTube. While on the surface it may 9

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appear that these brands are dominating their own channel presence, view ratios of this proportion usually indicate strong paid media activity. It’s a safe assumption, then, that a large driver of traffic to Chanel, Louis Vuitton, and Armani is the companies’ paid efforts. 73%

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Prada and Gucci, however, had relatively similar traffic across earned and Honda Porsche Ford owned.

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Another indicator that paid media factors for the aforementioned brands is the low engagement rates. For example, of Chanel’s 68 million owned-media views, the channel only received 224,000 engagements across 150 videos in total. Similarly, L’Oreal, the on-paper owned-media leader in beauty/fashion, has generated 164 million views on its owned media but only 122,000 engagements. Meanwhile, Maybelline, M.A.C, Urban Decay, and NYX, are seeing much higher returns in earned media with more than 5X the traffic and engagements than on their owned channels. This is to say that while some brands may be good at driving numbers on YouTube via paid media, the general fashion/beauty brands, outside of L’Oreal, are much more effective at getting fans to engage with their brand. However, there might be good news on the horizon for L’Oreal. The brand recently launched its DestinationBeauty YouTube channel, which features several beauty influencers. It’s still early, but data suggests that L’Oreal could become a pioneer in brand/influencer collaboration; the channel has a 2.2% overall engagement rate, which is far above the 0.07% it had across its other owned media in the past year.

Who’s Watching In terms of geography, all luxury brands have roughly 20% of their audience in the US and average roughly 5% or 6% reach internationally, most commonly in the UK, Italy, Mexico, and Brazil. In general, beauty and fashion are weighted heavier toward females, each with well over 70% of their audience represented by girls and women. Unlike luxury brands, and largely in part to the video formats offered (which we’ll get to in our next section), males are starkly not represented as engagers on beauty/fashion content. For M.A.C, 94% of the total audience is female, 77% of which is between 18 and 34. L’Oreal, Maybelline, and Urban Decay have similar age dispersion. Of the top five beauty/fashion brands, makeup company NYX has seen 75% of its audience between 13 and 25. And where are they watching? Unlike the luxury set, beauty/fashion engagers are largely concentrated in the US. The UK and Canada are secondary and tertiary markets across all brands outside of L’Oreal, which is strongest in the UK, followed by the US and Brazil.

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What Are They Watching Screen enough videos on YouTube and you’ll start to see why talent like Michelle Phan -- who built a presence focused on how-to and tutorial-based makeup videos -- have skyrocketed in popularity. The tutorials business on YouTube has certainly dominated the category. In fact, most beauty content is formatted as vlogs featuring makeup and product tutorials and “hauls,” where a vlogger reviews products from mascara, foundation, and liquid eyeliner, to flat irons and other hair products. And while the luxury brands may bring an en vogue roster of fashion, beauty, and product experts to their videos, as Tubular Labs data shows, the main driver of viewership and engagement is the earned media created by fans and popular YouTube creators. Of the top creators in the category, Zoella, Bethany Mota, Michelle Phan, and MissGlamorazzi have generated roughly 2 billion views across their videos. They are also more trusted and considered to be better authorities in product and the tutorial space than the brands themselves. [1] Portions of this section were taken from VideoInk’s Business of Beauty special issue. [2] Website: http://www.emarketer.com/Article/YouTube-Owns-Nearly-20-Share-of-US-Digital-Video-Ads/1011191

CPG

he purchasing pathway for consumer packaged goods is changing as more digital commerce and delivery services grow in popularity. It’s not likely that consumers’ shopping habits will remain the same as days past -- visiting the grocery store or popping to a vending machine for quick access to soda. These consumer behavioral habits are a driver for CPG brands to shift to digitaland content-focused strategies, a la Red Bull, which recently added a “Media House” to the brand. Other brands are beginning to follow suit as the competition for the millennial belly becomes more voracious. If asked the question, “What are the biggest CPG [consumer packaged-goods] brands on YouTube?” A reasonable, educated response could include service-industry giants like McDonald’s, Pepsi, Coca-Cola, and Budweiser -- and it would be right. These four brands alone account for over 300 million owned views on YouTube -- though it’s questionable that these views are independent of any paid-media campaigns, given that each of the Earned owned channels are seeing marginal engagements. Views Owned

Views Perhaps the most interesting insight in Tubular Labs’ data. about CPG brands on YouTube is Top55gaming gamingbrands brandsearned earnedyoutube youtube Top candy-toy brandstatistics Kinder Surprise, which has over 3.6 billion earned views on YouTube and over 3.1 statisticson onuploads uploadsininthe thelast lastyear year million engagements. It has absolutely zero owned presence, however, making its earned achievement all the more remarkable. Owned Owned Engagements Engagements

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To the uninitiated, Kinder Surprise is a candy manufactured by Ferrero SpA. The 3.6 billion earned-media views it generated came from some 68,000 brand-related videos uploaded to YouTube between September 2013 and September 2014. This means that Kinder Surprise fan videos averaged close to 53,000 views per video.

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A chief driver of this viewership is the SurpriseToys [1] channel, which features “unboxing” videos of Kinder Surprise candies. Some of these videos have racked up more than 50 million views, with the channel in total having accumulated nearly 500 million views since launching in 2012.

[1] YouTube: https://www.youtube.com/channel/UCmk5QB4JE-RT3ig4kvtVYxg [2] YouTube video: https://www.youtube.com/watch?v=uQB7QRyF4p4

That said, while Kinder Surprise has been responsible for a lot of earned-media views, engagement is not up to par. Overall, the brand has a miniscule 0.089% engagement rate across all of its earned media views. Comparatively, the rest of the top five CPG brands averaged 0.898%, which is 10 times the rate of the most-viewed CPG brand on YouTube in the past year and close to the 1% benchmark established by Tubular Labs. A big caveat is that Kinder Surprise content is specifically geared toward young children, who general has super-low engagement rates, according to Tubular. Intuitively, young children who are watching videos either do not have accounts, or are watching with parents without being signed in. Owned media is a different story. For one, Ferrero does not have an official channel for Kinder Surprise, which means that every single one of the brand’s 3.6 billion views since early September 2013 have been quite literally “earned.” For context, that is more than all of the earned and owned media views of the other top CPG brands combined. Beyond Kinder Surprise, though, the data is additionally interesting for multiple reasons. For instance, if we judge a brand’s success on YouTube -- in this context -- by the ratio of owned media versus earned media, then McDonald’s is succeeding where Budweiser isn’t. Of the remaining top brands in the CPG category, McDonald’s generated 382.2 million earned-media views; Coca-Cola came in with 360.1 million views; Coke’s competitor Pepsi, which has been very present on YouTube in the past year, netted 98.8 million views; and Budweiser inspired 33.2 million views. Based on those numbers, the Budweiser brand has nearly seven times as many views on content uploaded to its channel (230 million), than videos uploaded by fans (33.2 million). Success with owned content is not wholly surprising, as Budweiser is consistently one of the most prolific and entertaining video advertisers -- what’s a Super Bowl without a memorable Budweiser spot? It was no different this year, with the famous “Puppy Love” [2] commercial, which has racked up at least 51.9 million views on YouTube. When people watch a great ad on TV, they generally watch it again online. But as much as people enjoy watching Budweiser ads, it doesn’t translate to earned media -- which McDonald’s is excelling at. The fast-food giant generated 68.8 million views across all of the content on its official channel. That’s dwarfed by the 382.2 million earned-media views it had in the same time period. A major reason for this: toy/play-doh reviews, which only account for 7.4% of fan uploads related to McDonald’s, but are responsible for 41.7% of earned-media views. 13

Based on this curated list provided by Tubular Labs of McDonald’s review content, the engagement rate is once again very low. But like Kinder Surprise, this can largely be attributed to who’s watching this specific type of videos rather than a lack of “engaging” content. The other two top brands are pretty much in line across both owned and earned content. Pepsi generated 160.3 million views on its official content, certainly helped by multiple viral videos starring (car racer Jeff Gordon, in addition to a pretty prolific Super Bowl ad campaign. Coca-Cola, meanwhile, was pretty much oneto-one, with 382.5 views on official content in the past year, versus 360.1 million fan content. 18% 82%

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Who’s Watching Males 18-34 are the largest group of consumers of CPG-brand-related content on YouTube, representing between 65% and 80% of the engagement on Budweiser, Coke, McDonald’s, and Pepsi videos on their owned channels. A majority of the female engagers fall in the 18-24 category for these brands as well, outside of Coke, which has a stronger presence among the 25-34 age demographic. Each of these brands is also the least popular amongst both males and females 55+ in age with less than 2% of total engagers across their channels.

Similarly these brands are primarily viewed within the US/ However, McDonalds is particularly high in the US, with 90% of it’s owned audience watching content from within the US -- further proof that the “Golden Arches” are staple among Americans, despite McDonald’s incredible global presence. On the other side, only 19% of Coke’s audience is in the US, with Brazil and Mexico accounting for another 15%.

What Are They Watching As discussed earlier, earned-media outlier Kinder Surprise has received billions of views as fans record and share “unboxing” videos of breaking open the chocolate eggs to reveal the surprise toys located within. This particular style of video has been growing in popularity across most product-related categories from gaming, beauty, and athletics, to the CPG category. While Kinder Suprise is not representative of the style and formats other CPG brands are seeing, the unboxing genre on YouTube is not to be underestimated. Pepsi and Coca-Cola on the other hand have taken a story-driven approach as they look to follow in the footsteps of fellow beverage company, Red Bull. On Coca-Cola’s channel, there’s a blend of videos that are episodic and oriented around reality, docu-series, and narrative formats. Most of these videos also support themes of diversity, mixed cultures, and the global village. Most of the channel’s recent content has centered on the World Cup and the various cultures involved in soccer as well as the countries involved in the global tournament. Pepsi, in comparison, is more diverse in the themes and pop culture categories it’s tapping. Music, sports, celebrity, and comedy are all common threads in Pepsi’s videos. The company has even announced the launch of a NYbased studio -- investing millions into original programming -- to expand its slate of branded content. Much in the same vein as Pepsi and Coca-Cola, Budweiser has built a variety of content formats -- most popularly with its “Made in America” series, which aims to get back to the roots of American culture and music. Bud’s video library also spans celebrity and red carpet interviews as well as its various ad campaign videos. Pepsi and Coca-Cola have also speckled their original video with their own ad campaign videos.

Gaming Gaming is a massive category on YouTube. In fact, it’s the second biggest, according to data from Tubular Labs. Among all channels on the video site that have at least 250 subscribers, 14.7% can be considered gaming. That puts gaming slightly ahead of entertainment, which accounts for 13.9% of channels, and leagues behind music, which tops the list with 25.5%. With that sort of reach, you’d expect the top gaming companies, from developers to publishers, to be active on YouTube. And by and large, you’d be right. The top gaming companies on YouTube are the ones you’d expect: Riot Games, EA Sports, Activision, Rockstar Games, and Mojang. This is because each company owns and publishes one of the most popular gaming franchises in the real world -- and as a direct result, also on the world’s biggest video site.

Earned and Owned The top five games on YouTube, in terms of earned media, are Activision’s “Call of Duty” franchise, the now-Microsoft-owned Mojang’s “Minecraft,” Rockstar Games’ “Grand Theft Auto” franchise, EA Sports’ “FIFA” franchise, and Riot Games’ “League of Legends.” Fan activity around all of these titles is massive, but “Call of Duty” and “Minecraft” are far and away the most popular in generating fan-made media with 26.5 billion and 23.1 billion earned views between September 2013 and September 2014, respectively. In fact, in the same time frame, gameplayers have uploaded 9.3 million “Call of Duty” videos and 9.9 million “Minecraft” videos to YouTube. In the case of “Minecraft,” these numbers are unsurprising, as the open-world game (referred to as “sandbox”-style in gaming circles) allows users to create and explore entire environments. There is no narrative, no scripted, cinematic interludes, just pure gameplay limited only by the user’s creativity, which allows for a wide variety of content -- from simple “Let’s Play” videos to building tutorials and more. It’s similar with the “Call of Duty” games, which do offer a “narrative” for people to follow but are more popular for their online gameplay capabilities. Highly competitive, “Call of Duty” gamers want to learn how to get an edge from other expert players. Videos of cool and funny highlights also prove to be popular, much in the way that sports fans will watch game highlights. 16

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Owned Owned Engagements Engagements

To be fair, the other popular titles also account for their fare share of fan content. Rockstar’s “Grand Theft Auto” games generated 10 billion earned media views from September 2013 to September 2014, followed by EA Sports’ “FIFA” with 2.3 billion (gaming-only) views, and Riot Games’ “League of Legends” with 2.2 billion views. And engagement is strong. Combined, the five gaming franchises averaged a 2.85% engagement rate across all earned media views -- that’s nearly four times the rate averaged by the top five auto brands. Another reason this number is remarkable, according to Tubular Labs, is because how it tops of the overall average engagement rate on YouTube, which is about 2.5%. What’s more, many top YouTube creators average an engagement rate of 3% or higher. By being only a few percentage points way, Forddemonstrates the opportunity gaming brands Ford this have in reaching this passionate audience.

When it comes to the YouTube channels the top gaming companies actually own, the average engagement rate 1.27%. Unsurprisingly, this is due to a lot less activity on these channels, with EA Sports as the most prolific uploader between September 2013 and September 2014 with 739 “FIFA” videos. But it’s still a positive stat, per Tubular Labs, as it’s north of the 1% owned-media benchmark that most brands should aspire to. Viewership of owned media is also strong. Riot Games pulled in 164.2 million views across all official “League of Legends” videos, besting EA Sports/“FIFA” (143.4 million) and Activision/“Call of Duty” (117.8 million). And as impressive as “Minecraft” is in generating earned views, the title sits far behind the rest of the top five in terms of owned content. Primarily, this is because Mojang doesn’t have an official brand channel for “Minecraft,” and because of the game’s user-centric nature. Mojang is happy to let its users do the heavy lifting on YouTube, because that’s the entire point of the game. Some of the other publishers, though, could do more (Rockstar Games, for instance, as we will explain in a later section). The passion for gaming content, as evidenced by the sheer numbers of users watching such videos, on YouTube is unlimited. And while hundreds of millions of views is nothing to sneeze at, the opportunity is certainly there for more.

26%

98%

94%

98%

74%

Who’s Watching It should come as no shock to anyone that young males account for a significant majority of YouTube’s viewership for gaming content.

92%

Assessing the top brand channels within the gaming category, males account for 94%-98% of the total viewership. Riot Games’ main channel for “League of Legends” (6.2 million subscribers) has a 94-6 split between males and females. EA Sports’ “FIFA”/football channel (1 million subscribers) has a 98-2 split. Activision’s channel for “Call of Duty” (2.3 million subscribers) is also 98-2.

Digging a bit deeper, the most popular age demographic for gaming content are 18- to 24-year-olds (both genders), who account for 57% of viewers on the “League of Legends” channel, 54% on the official “FIFA” channel, 55% on the official “Call of Duty” channel, and 53% on “Grand Theft Auto” owner Rockstar Games’ channel. Appropriately enough, “Minecraft” is slightly more democratic across genders and age groups. Owner Mojang’s official YouTube channel (950,000 subscribers) has a 90-10 split between males and females, with 18- to 24-year-olds accounting for less than half (44%) of all viewers. Meanwhile, the top “Minecraft”-centric channel on YouTube, SkyDoesMinecraft (10.4 million subscribers), boasts a rare 74-26 split between males and females. The United States is the biggest market for gaming content, though other countries, including the United Kingdom and Brazil, are not too far behind. Of the 306,000+ gaming channels on YouTube, 90,000 come from the United States, 33,000 from the United Kingdom, and 21,000 from Brazil. As emerging markets mature, so will the niche content categories popular on YouTube.

What Are They Watching There is a certain, symbiotic relationship between YouTube and the gaming category. Both are inherently about giving “end-users” more control. Anyone can shoot a video and upload it to YouTube, and get other people to watch. Anyone can play a video game and create their own narrative -- and in the case of “Minecraft,” entire worlds. This is reflected in the type of gaming content available on YouTube. While most of the “official content” from a gaming company tend to be trailers and related promotional content, the YouTube gaming community overall prefers actual gameplay content. The top gaming topics on YouTube include “gameplay,” “adventure,” “Let’s Play,” “walkthrough,” “Minecraft,” and “Call of Duty” -- all suggesting a desire for users to create and watch game content rather than a scripted video. Admittedly, a few of the top brands go beyond simple trailers and gameplay videos. For instance, Riot Games owns and operates a global international e-sports competition around the “League of Legends” battle-arena game. Matches from the competition are streamed live and on-demand on the league’s Twitch and YouTube channels. Similarly, EA Sports will also host “FIFA” competitions among top gamers, and in some instances, professional soccer players. But others don’t. Rockstar Games accumulated just 22.1 million owned-media views in the past twelve months for its incredibly popular “Grand Theft Auto” franchise, which is also known for its open-world setting, seemingly unlimited number of in-game activities and “Easter Eggs,” and generally addictive gameplay. But until recently, the company’s main YouTube channel was almost entirely comprised of trailers and related official videos. In recent months, the company has hosted online live-streams of gameplay competitions, which suggests that the brand is ramping up to do more on YouTube. Expansion into multiple content formats keeps the games fresh in the minds of YouTube viewers who could easily be persuaded to watch a different video, or play a different game.

in Summary

uilding a solid brand presence on YouTube isn’t easy, but it’s not rocket science either. In evaluating the various categories we have in this white paper, a primary takeaway is that engagement is what matters most for brands on YouTube. And the blend of owned, earned, and paid media factor into creating the strongest relationship with an audience, whether on a brand’s own channel or across the broader YouTube ecosystem. To do an accurate assessment, one must look closely at the disparity between views and engagement. If a channel has massive view count paired with marginal engagement, it’s a direct sign that the views were bought, rather than organically generated. Additionally, the brands who are embracing authentic formats on YouTube that resonate with the core themes and belief systems of the brand are winning. Pair that with various influencer activations and one-off branded or viral videos and a brand - whether CPG or Beauty - can most certainly build a balanced presence on YouTube on their own channels, as well as through earned media. In the spirit of analysis, we’ve benchmarked the brands in each category by engagement rate to the volume of videos created, across earned and owned, to surface the heros and zeros of each category.

AUTOMOTIVE All-Star: Porsche & Honda Porsche had the highest owned-media engagement rate (0.61%) and third-highest earned-media engagement rate (0.71%). In other words, the brand was pretty much consistent across both types of content. Where it’s lacking is in how active the brand is on YouTube. Porsche ranked dead-last in the number of owned and earned videos uploaded to YouTube, which means it was also last in both owned and earned views. That said, with campaigns like “Porsche 911,” and the premium nature of the brand, there is a great opportunity for Porsche to really succeed in the category -- if it chooses to. Honda, which isn’t a luxury-car brand, is in a similar boat. Ranking third in owned engagement (0.15%), the brand also was the only one to surpass 1% in earned engagement. And unlike Porsche, Honda also cleared 30 million total views in the past year, generating 71.7 million owned-media views and 261.1 earned-media views during the measurement period. No-Star: Toyota Toyota was first in both owned and earned views, but last in engagement -- 0.06% rate on all owned content, and 0.7% on all earned content. That, in addition to the fact that Toyota is a top 10 advertiser in the US, strongly suggests that many of the views were a result of paid-media campaigns, which is an effective way to reach a lot of people, but, again, is not conducive to building and retaining a fan-base on YouTube. 20

GAMING: All-Star: “Minecraft” Was there any question? Mojang’s game ranked first in owned-media engagement with 3.3%, and second in earned-media engagement with… 3.3%. That’s right, whether the content comes from Mojang, or is created by one of the game’s many fans, it’s equally engaging. The only fault we can find with “Minecraft”’s YouTube presence is how little of it is official. In the measurement time period, there were only 50 official “Minecraft” videos uploaded to YouTube, altogether generating 6.7 million views. That’s far below a majority of the category as a whole, but we’re willing to bet that changes now that Mojang is under the Microsoft umbrella. “Minecraft” is the current, undisputed king of YouTube gaming, and it has the opportunity to get even bigger. No-Star: N/A Speaking of opportunities, every gaming franchise within Tubular labs top 5 has the opportunity to grow on YouTube. Rockstar Games, which produces and publishes the “Grand Theft Auto” games, just started using its channel for more than trailers and official promo videos. Activision (“Call of Duty”), EA Sports (“FIFA”), and Riot Games (“League of Legends”) are already expanding content strategies into formats ranging from eSports to original series. The engagement is there, the opportunity is there, and we expect the gaming category to continue succeeding on both levels in the future.

LUXURY All-Star: Prada Prada led the runway with 1.3% engagement in earned and was the second most-engaged with brand across its owned channels. Even more impressive about Prada’s performance was that it received over 10K engagements on its owned channels across only 23 videos gaining the highest ratio of engagement and views per video created. As Tim Gunn would say, Prada knows how to “make it work.” No-Star: Louis Vuitton Despite the brand’s 46.8 million views achieved across its owned channels, we’re calling this one out for hyping the view counts, given the engagements stack up to barely 18K across 56 videos. The results are rather clear - Louis Vuitton is using its deep pockets to pump up a paid media campaign and generate views. Aside from Louis Vuitton-owned channels, the brands earned video engagement rate landed it the 4th spot in the category with .4%. Despite the low engagement, Louis Vuitton has the second highest volume of videos generated by fans, well over 8K in fact!

BEAUTY All-Star: There’s a new makeup player in town - NYX cosmetics. Not only did NYX top the beauty brand category with 3.3% engagement rate in owned but the brand had the best engagement given the volume of videos created - 39 - and while it tied for second in earned media, NYX’s 77K fan videos achieved the greatest density of engagement - 235 per video video. No-Star: L’Oreal In opposition to NYX (and the other brands we’re highlighting as All-Stars), L’Oreal has a disparate amount of views to engagements across its owned channels, signaling these are likely views that were bought. They also produced the greatest volume of videos (over 3100) but only garnered 122K engagements across those videos. With a meager engagement rate of .07% on owned and marked the lowest in Earned at 3.2% of an engagement rate. With those kinds of numbers, it’s a no-brainer that L’Oreal holds the No-Stars title in Beauty. However, as we also noted in our report, the L’Oreal’s Destination Beauty channel has the potential to bring its earned and owned presence back to balance.

CPG All-Star: Coca Cola Coca Cola is one beverage brand that knows how to earn and own YouTube. Across the board, the top 5 CPG brands had rather weak engagement rates but we marked Coca Cola our All-Star since it was the most balanced in both earned and owned media. Coke also generated the greatest number of views and engagements across the 63K videos created by fans. Additionally, for Coca Cola’s owned videos, all 3500+, fans engaged with their videos nearly 200 times per video, and each garnered over 105K views on average. No-Star: Budweiser Despite the quality of content that Budweiser is producing on its channels, the alcoholic beverage brand taps out as our CPG No-Star on account of an engagement rate of .1% on both its owned and earned media on YouTube. Furthermore, the brand saw the least amount of fan-generated videos, over 3X fewer than the other brands in the category. While the brand has accumulated over 260M views across both earned and owned, the balance of videos created in relation to the volume of views and engagements was lacking, and for this reason, we think Bud should be wiser about its YouTube presence all around.

Content marketing drives brand awareness, market penetration, preference and action. In combination with a paid, owned and earned marketing strategy, brand content is the accelerant required to reach maximum impact and performance.

The preferred platform for marketers targeting millennials through video is YouTube but new video marketing programs are launching in ever increasing numbers. From original brand content and branded entertainment to co-created videos and curated playlists, marketers are focusing more of their media dollars onto content.

The results look good on paper but paint a picture of mixed results. Original videos that are little more than advertising may have great view counts thanks to paid media but little to no engagement from their target audience. Those brands that approach content marketing in an authentic platform committed approach find that success can be predictable and repeatable. The multi-channel networks (MCNs) are firmly established as sherpa partners for brands, marketers and agencies to successfully navigate the YouTube platform. From content development, to YouTube specific production, and access to the most powerful YouTube celebrities and influencers, these leading digital media and entertainment companies are maximizing the return of every marketing dollar. The Global Online Video Association (GOVA) member companies alone have executed hundreds of brand content marketing programs in 2014 and are on track to help marketers increase their video content marketing spending by 300% over 2013 with more tacticle, meaningful and scalable results than ever before. Savvy marketers realize that online video is a fundamentally different media for advertisers with strong online communities in which the creators themselves exert huge influence upon paid and earned media. A media strategy relying solely upon pre-roll advertising is simply not optimal and will fail to generate a meaning fulfill impact to any business. Key performance indicators (KPIs) like views will be met, paper will be pushed and someoneâ&#x20AC;&#x2122;s job will be safe. Advertisers music become part of the content ecosystem and create their own conversational experiences. The MCNs provide that bridge for achieving authenticity and creating undeniable value for marketers. The leading online media companies, representing over 15+ Billion monthly video views announced the formation of GOVA in early 2014. GOVAâ&#x20AC;&#x2122;s long term vision is to support the companies with significant investments in producing and monetizing original digital content including owning and operating a YouTube multi channel network. During its first year, GOVAâ&#x20AC;&#x2122;s mission has been to increase the awareness of the digital originals category amongst brands, agencies and consumers, optimize existing content marketplaces, explore common industry nomenclature and measurement standards, and increase dialogue with all 23

partners in the digital originals supply chain including YouTube, Amazon and Facebook. Marketing innovation opportunities are more numerous and as complicated as they have ever been. The power of YouTube as a content marketing platform the original, co-created and curated content is just starting to be explored by marketers. The good news is that video content marketing results are repeatable, meaningful and scalable and with the right ecosystem partner any marketer can ensure they take the most successful path. Paul Kontonis Executive Director Global bal Online Video Association

The Global Online Video Association (GOVA) is an industry-funded nonprofit corporation that advocates and supports the advertising, licensing, production, distribution and overall business interests of its member companies to accelerate growth in the online video industry. Founded in 2014, GOVA member companies have a significant investment in producing and monetizing original digital content including owning and operating a YouTube multi channel network. for more information please visit www.gova.cc.

Each month thought leaders throughout the industry gather at 212 NYC’s panel events to discuss topics and challenges facing the digital advertising community. At this summer’s Video Panel presented by 212 NYC and sponsored by TubeMogul, moderator Sara Poorsattar (Director of Product Development at Times Video) and panelists Raymond Greene (VP, Director of Media Activations and Partnerships at Digitas), Natalie Bokenham (SVP Managing Partner at UM WW) and Ari Bluman (Chief Digital Investment Officer, North America at Group M), gathered to discuss programmatic advertising in mobile video and the future of the medium that has everyone watching. If programmatic advertising sounds unfamiliar to you, you’re not alone; Advertising Age recently reported that only 23% of marketers actually know what it means. To put things in perspective, Green explained: “Programmatic is essentially the center of your demand side and your buying side. It’s putting information in front of the right person at the right time, taking into account all the individual needs and data points of that particular person.” Bluman went so far as to simplify the process to pure automation, while Greene highlighted a “need to look at the output, and then re-funnel that to inform future buys. It’s like social media,” he said. “A brand puts a post out, but that’s not the end of it. People might comment negatively or positively and then it’s the brand that has an obligation to react. It’s not a plug and play process; it’s an ongoing cycle.” Experimentation and trial and error are often the best ways forward when in doubt. The speakers all agreed that embracing uncertainty and finally shedding light on what’s wrong, instead of simply lauding what’s right, is vital to continued growth in the field. In identifying current and arising issues, Bokenham pointed out that 75 percent of spending tends to hits the same 25 percent of an audience again and again, illuminating the need for better budgeting and diversifying linear TV spend. She also highlighted the fact that the idea behind cross-screen initiatives and catching people on different devices at different times of the day just isn’t working yet as promised. Instead, Bokenham is most excited by “the promise of interactive digital experiences,” bringing up 25

the example of Sesame Street’s collaboration with Xbox and Microsoft’s Kinect, a line of motion sensing input devices. The project makes it possible for a child to become virtually involved with the show, playing catch with Elmo and Grover, for instance, and blurring the lines between traditional television programming and the future of gaming. As the world moves towards total connectivity, Bluman ascertains that the ability to truly track users is of utmost importance. “User behavior controls viewability,” he said. We may be able to track things like drop off rates and viewing times, but it’s the where, when and how of usage across devices that we’re inching towards, and we still have a long way to go. Finally, don’t be too quick to dismiss TV while making room for digital. When it comes to different screens, “It’s not an and/or and it’s never going to be,” claims Bluman. “It’s about building a bridge between TV’s continued success and reach and seeing what digital can add to it.” For marketing professionals, it’s all about utilizing audience verification. Analytics tools likeComScore and Nielsen’s Online Campaign Ratings (OCR) and Cross-Platform Campaign Ratings are key to important decisions like whether you should be putting your impressions towards TV or digital. “All screens are not created equal,” Green reminds us. But if you’re planning on ditching TV, think again. Bluman’s confident that companies that move solely towards digital, taking away all TV funds, are bound to fail. Turns out, like with most things, it’s all about finding the perfect balance – and for now, the search continues. ____________________________________________________________________ 212 IS THE GALVANIZING FORCE FOR THE INTERACTIVE ADVERTISING COMMUNITY IN NEW YORK CITY 212 is New York’s leading organization for the digital advertising industry, comprised of a membership of over 5,000 digital media, marketing and advertising professionals. The mission of 212 is to create a forum for members to make connections, share insights and support the digital advertising community through education, programming and philanthropy. 212 is a non-profit, volunteer organization and membership is open to all advertising professionals in the New York area. To learn more about 212 NYC and join the organization, visit ww.212nyc.org 26

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