Update: YouTube has sent us the following statement: “Our policy on burning-in ads has not changed. We’ve had policies in place for a while now that prohibit creators burning-in ads to their content. Recently we added a question to our helpcenter to more accurately reflect our existing policy.”
Feb 25th 2015: YouTube has banned the use graphical title cards, which includes the use of sponsor logos and product branding in videos, unless the sponsor pays Google to advertise on a particular channel, according to a revised FAQ document. The move is likely to hit multi-channel networks and YouTube Stars as their sponsors will now have to pay Google a cut directly for the use of their logos in video overlays.
Although YouTube has banned the use of sponsored logos, it says that video creators can creators can still add “text-only title cards where there is Paid Product Placement for the purpose of paid product disclosure only.” Digiday reports that a YouTube representative said that the changes were aimed at preventing advertiser conflicts and ensure viewers don’t feel bombarded by ads.
Digiday also adds that YouTube has created a new ad unit called “product card” which is a six second pre-roll spot which appears before the main content and allows brands to insert a quick message or endorsement.
The conflict between YouTube ads and ad slates (Nikhil adds)
This conflict between ads included in the video by the creator YouTube isn’t new. A content creator, on condition of anonymity, had told MediaNama Insights last year that
“There were many problems which we faced with YouTube because a video would open up with a 15 second pre-roll of an ad that YouTube was playing and then it played a 10 seconds slate of our sponsor (a part of the video). But YouTube said that because the brand we put in was so prominent, they could not get other brands of the same category. As a content provider, I really do not care about that because our partnership with YouTube is such that we upload content and they are supposed to monetize it. We had YouTube telling us that we need to commit that the brand, which was already sponsoring our video, will also run pre-rolls. The brand obviously didn’t want to spend further money on running a pre-roll.
This was a big problem conflicting on YouTube’s ad model. YouTube threatened to put our videos down, but since it was a very popular show, we could afford to take a very aggressive stance. We knew YouTube had more to lose than us. This is our reason for not using consciously YouTube as a central platform, because we do not want this to happen, since all of our videos have an opening slate of advertising.”
What this means is that the balance of power is shifting on YouTube, from the creators to YouTube. We’re not sure of a few things:
Firstly, how does the ban on ad slates impact branded shows? For example, Ask AIB which is a Q&A show by All India Bakchod, which is sponsored by AskMe:
Remember that such deals often allow channels to also monetize by playing YouTube ads.
Secondly, how does this ban impact historical content from partners? Will partners have to go and edit content?
Thirdly, how soon before YouTube begins expecting revenues for product placement in videos?
Fourth: how does this impact brand owned content? Brands also get content created for their YouTube channels, with branding embedded. Is the content banned, or is it just advertising on that content?
Fifth: how soon before YouTube begins expecting revenues for brand overlays? For example, the Snapdeal integration with AIB, that sent users to purchase products on the Snapdeal store?
This is just YouTube getting greedy: Typically it keeps 45% of revenue for ads that play on YouTube, but none of the revenue from ad slates that are embedded. It wants a piece of that.
YouTube MCNs in India
The YouTube MCN market in India, though still nascent, has been witnessing a lot of activity off-late. Some key companies in the space include studios like Culture Machine,HomeVeda, Nirvana Digital, One Digital, Pepper Media, Govindraj Ethiraj’s Ping Digital,Rajshri Media, Rightster and #fame among others.
In November 2014, Disney-owned YouTube MCN Maker Studios had signed up several Indian YouTube channels for its network, including those run by All India Bakchod and Kanan Gill, which were being managed by Chernin Media-backed Only Much Louder.
Disclaimer: Askme is also a sponsor for MediaNama