VEVO 10: ‘When we talk about our audience to advertisers, it solves a problem for them’

Vevo has partnered with MBW to mark its 10 years in the business, reflecting on its achievements to date, analyzing the current market and looking ahead to future opportunities.

Here, President of Sales and Distribution Kevin McGurn discusses the evolution of monetizing music video – and how Vevo has created a unique opportunity for advertisers to tap into the biggest stars, hottest content and premium events within the sector.


I’d like to start off with a little bit of background, as in how you arrived here at Vevo and the experiences that led you here.

I started at Vevo a little more than two-and-a-half years ago, before that I was with Otter Media for two years, a year at Shazam, and Hulu for almost seven years. I was brought in to run sales and to speed up the strategy that we were already pursuing more of an audience-based TV-like sale, targeting ad agencies and advertisers, which was very much my background. In general, the strategy was to accelerate the growth of Vevo’s direct ad sales and revenue profile.


One of the things that happened, not long after you joined, was the renegotiation of the deal with YouTube. Can you talk a little bit about the key points in that new deal from your point of view and also how the subsequent sort of demarcation of sales roles and responsibilities has changed and how much of a challenge that was to you and your team?

The main part of the deal that affected advertising sales was being added into Google Preferred. Previous to that change we mainly saw backfill inventory through the auction. I wouldn’t say that this presented a problem necessarily, it was just a different challenge that we had to figure out.

We needed to shape our go-to market so that each sales force’s value proposition could complement one another.

When you sell the value of the content as opposed to the number of impressions, you have the advantage with major brand marketers. And selling impressions and basic audience targeting is what Google Preferred does best; they target more broadly and focus on data and audience. We also sell audience, but we focus down to the artist and video level and guarantee the content and advertiser is adjacent to.

“When you sell the value of the content as opposed to the number of impressions, you have the advantage with major brand marketers.”

We key in on tactics like brand safety, celebrity moments like music video premieres, and the catalog of a given artist, and in doing so, we command premiums and have a higher rate of sell-through. The demand we can generate against the world premiere of a video meets or exceeds the supply available which gives us a packaging and pricing advantage in the market.

We were also able to look at the way people are consuming and sell into those trends. As an example, would a buyer want to isolate and purchase impressions that occur on TVs in the living room? We have seen 40% growth in living room inventory for the last two years, which allows us to package and price TV impression and sell that to you.

Would you like target audiences on a hyper-local basis? We isolate impressions by zip code and will sell that to you. To a buyer, we look a lot more like a TV network than a multi-channel digital content provider, or a data driven seller of auction impressions. That’s a huge benefit to us.


I was wondering, though, if buyers, agencies, brands etc have found it easy to get to grips with post the re-negotiation. Do they sometimes think they’ve got Vevo ‘covered off’ because they can get it through YouTube?

Yes, initially, we thought market confusion could be a problem. We planned for it and went to market in a fundamentally different way than YouTube and Google Preferred to protect against the confusion. It turns out that a combination of our go-to-market and theirs made it a pretty easy distinction.

“We have been laser focused on the content and the premium nature of our direct sales relationships with advertising agencies.”

For instance, we really favor non-skip advertising. That’s the ad unit that we think befits our content the best and brand marketers prefer. Google as a company rooted in search, favors automated, auction-based, skippable advertising that are more performance driven. It’s complementary.

We have been laser focused on the content and the premium nature of our direct sales relationships with advertising agencies. And when you go out as a big organization with thousands of sales people and hundreds of products there’s not an emphasis on any particular type of content or inventory, which we solve for in our offering.


What can you tell us about your audience? 

They’re light TV viewers, we skew younger than your average TV audience. The average TV audience is over 50 and our 18-49 looks a lot like 18-34 or 18-24. If you look at it as a barbell strategy, as a buyer, and you’re trying to fill in an 18-49 demographic, well, you can buy 44-49 on TV and you’re going to get the rest through other means, and we would be on the balance of a heavy TV strategy.

In addition to general audience, we can hyper target into audiences and get very prescriptive, because it is internet delivered, because there’s actual data that you’re targeting, it’s not just a household number that you’re projecting.

When we talk about those audiences to advertisers, it solves a problem for them. Because people are watching less on linear television and they’re [TV audiences] getting older, we solve for a balance of audience, lower frequency and additional reach.


You mentioned brand safety, and it’s a key phrase when it comes to the differentiation of your offering from YouTube and others. Can you talk about what you mean by brand safety and how it works in practice?

Brand safety starts with transparency, you know exactly what you’re buying and when you’re buying it. We have been able to draw on our catalogs existing content ratings and we were able to go out and develop a currency that people were used to buying.

“Brand safety starts with transparency, you know exactly what you’re buying and when you’re buying it.”

For all of our new content that comes in the door, we use both human and machine-based ratings. We have this great go-to-market strategy that pairs your inventory targeting against an audience with the rating of the content itself. And that has allowed us to clearly and concisely communicate brand safety in a way that they were already used to buying.


You’ve talked about the laser focus you can get through to the regional buying and regional targeting. But, almost on the flip side, can you talk a bit about going more global and looking into new territories, which is something I know is top of the agenda for you guys at the moment?

We have an amazing gift at Vevo. We are at the intersection of music, video content and TV. Music is inherently globally licensed. Persistent global licensing with sales rights is extremely rare in the content world. You can think of any television show, even on-demand original series, they are typically owned differently and syndicated differently by country.

We don’t have that problem. We are able to go out and sell artists and their videos globally. And we do sell to global advertisers. You can think of folks like Apple, Amazon, Samsung, Universal, Disney, Unilever and Coca-Cola; they are able to plan globally and buy across borders.

“Our goal is to maximize the commercial and promotional value of music videos globally, and wherever we do sell directly, we’re increasing the value, in unison with what YouTube provides as backfill.”

Our goal is to maximize the commercial and promotional value of music videos globally, and wherever we do sell directly, we’re increasing the value, in unison with what YouTube provides as backfill. We have proven that without a doubt: anywhere we go direct, we find incremental revenue and we find premium price, just because we sell it in a different way. We’re really keen to expand those territories that we operate in, but we want to do it very responsibly.

Myself and the team we have here are focused and we run a pretty frugal outfit. We want to look at scale. We don’t want a local radio model where we have people that are actually selling things door-to-door, but we want to have a highly scaled internet-based inventory offering and a smaller sales team that generate very high revenue per head.


Are there any particular territories that are catching fire for you at the moment? And any you’re particularly targeting at the moment?

For sure. We made a bet a couple of years ago in Western Europe and the UK in particular. We actually did close down our office in Germany and consolidated that sales opportunity into the UK. It proved very successful, not only in total revenue, but in the premium price we were capable of selling. We were able to sell big buckets of inventory to advertisers on a pan-regional basis, and the UK team has been performing at a very high level and continues to grow.

In the UK, particularly we found a tremendous amount of success with brand safety, I would call it kind of ground zero to the brand safety issues that a lot of the big platforms have been experiencing. We’ve been able to run through that open door and our sales are growing much more rapidly than any of the platforms on a percentage basis.

Outside of Western Europe, we have increased our focus on Canada, which is a sensible market to sell into as an extension of the US. We are also starting to sell into Mexico and enhance our Multi-cultural, Latino selling proposition, while we continue to monitor a lot of other territories.


Talk to us a little bit about where the advertising dollar is going at the moment and where you see it going in the future; the big picture.

First and foremost, just from a market perspective, you are seeing a massive expansion of options that consumers have to find and enjoy content. Over time those options will contract again. Too much choice will not be profitable and we will see consolidation. I think in doing that you’re going to have a fragmented expansion of advertising, and then a slight contraction as offerings consolidate.

There are only so many people on the earth and so many hours in the day that people can watch video. Therefore, ultimately, there’s a cap on our opportunity as an industry, but the winners and the losers will shake out on who gets the most recency and frequency of viewership to their content.

“There are only so many people on the earth and so many hours in the day that people can watch video. Therefore, ultimately, there’s a cap on our opportunity as an industry, but the winners and the losers will shake out on who gets the most recency and frequency of viewership to their content.”

I think there’s going to be a big arms race in both distribution and content. That will be extremely expensive for a lot of companies, and then the advertisers will take benefit from the winners. I mean, advertisers only ever gravitate to winners, because that’s where the audiences are.

I feel like we’re at a really good spot. We get fresh content every single day from some of the biggest celebrities in the world; we’ll never have an issue with new content that’s popular. The global rights that we represent is a huge advantage.

Next year will be interesting here in the United States, with the elections and the Olympics. We always see an interesting dynamic in that a lot of the traditional inventory gets sucked out of the market, and either newer advertisers that don’t participate in the up front, or up front advertisers that aren’t willing to pay the premiums, come knocking on doors like Vevo to spend their money and find the reach without actually having to go in and compete with political dollars or Olympic sponsors.


Do you think that video advertising generally is recognized as a key revenue stream by the music industry itself and by the labels?

I’ll say this, it’s our goal to make it super relevant and to make it a big line item. If you look at the total footprint, and without really discussing numbers, we’re a meaningful percentage.

The difference, I would say, is that the economics around it, this being a CPM-based business versus a per-play business in streaming, makes it a little different. It’s the entire goal of this business to make sure that we continue to grow that relevance.


How important is the rise of OTT consumption, in terms of viewing trends generally and to you and your business model in particular?

It’s interesting – I mean, I’ve always been keenly focused on OTT and any type of internet delivered content, from my days at Hulu onwards.

From a strategy perspective, we were always in the lane of TV and upfront sales, but now we have an environment that we can isolate and that took any shadow of doubt that this was TV, away from any buyer.

Within the holding groups that we transact with, we do six up fronts every year, three of which are global, it has been a huge call out for us to sell specific impressions, guaranteed in the living room, creating a supply and demand around that inventory where we can represent in the upfront that if you don’t buy it now, it won’t be there.


And can you talk a little about the deals you recently announced with Pluto TV and Samsung TV plus?

It’s no secret that we’ve been expanding in a lot of different places. I mentioned the growth and the fragmentation of the different ways that you can watch everything, from boxes under your TV to apps on the screen. When you turn on a TV and you see all of the opportunities that are in front of you; we want Vevo videos to be in every single one of those. That’s really the strategy.

“Our goal is to be in the neighborhoods that people frequent and we music on television to fight for airtime, because we think that the quality of the content and the variety of the content can be a huge advantage to us.”

We just announced Pluto TV and Samsung, and that’s in addition to others: Apple, Amazon, Roku, and then even operating system level deals, like Vewd, which was previously called Opera.

Our goal is to be in the neighborhoods that people frequent and we music on television to fight for airtime, because we think that the quality of the content and the variety of the content can be a huge advantage to us. How do you let the internet and its inherent architecture make the best possible video experience for you? Because it’s going to be different for you, me, everyone – this can be a challenge, yet we see it as an opportunity.Music Business Worldwide

Related Posts