Rent-to-own News - YouTube positioning as "brand builder"

Despite online video and commercial-free DVRs, companies still spend 38 percent of their advertising budgets on television ads and just 1 percent on online video.
 

YouTube is trying to change that.
 

In a bid to lure TV ad dollars, YouTube is making the case to brands that online video is the best way to reach customers, according to the New York Times.

It is part of the YouTube’s evolution from a free-for-all Web site for goofball videos to, it hopes, a destination for professionally produced videos and the advertisers that want to appear near them.

As the Internet's largest video Web site, YouTube's push to be a key shaper of customer opinion and brand awareness is a fitting reminder for the rental industry to get company messaging outside the box of traditional advertising and leverage the power of the Internet to drive marketing efforts and campaigns.

Marketing expert Jill McDonough emphasized this in her presentation of the industry's first marketing plan to APRO conventioneers this summer, recommended the industry's embrace of tools such as YouTube, Facebook and Twitter as critical to getting the estimated 30 million potential RTO customers familiar with the benefits of rent to own.

"It is time for rent to own to enter the 21st century and take advantage of the world in which our customers live," said Richard May, APRO public affairs director. "We stand at a new precipice. This is where we can really capitalize on all the hard work the industry has done over the past 30 years and really promote our competitive advantages not only through traditional marketing, but through new media as well."

May applauds the growing number of RTO's that have jumped in and are utilizing YouTube, Facebook and Twitter.

"If you haven't established a YouTube channel or Facebook page, you are missing out on an enormous resource at your disposal," May said. "However, to keep it real, you have to keep the site active and conversational. It's no longer about talking "at" customers, it's about talking "with" customers. That's how you build word of mouth and that's how you build brand."

For rent to owns, McDonough also recommends utilizing the medium for customer testimonials to promote the industry's exceptional customer service, flexible contract terms and unique service proposition including the nine key components of the RTO transaction:

1. New selection
2. Return anytime
3. Flexible payment terms
4. Won't harm credit rating
5. Free delivery and set-up
6. Free repair
7. Upgrade for newest technology
8. Try before you buy
9. No debt

YouTube has been trying for two years to transform itself into a bigger revenue producer for Google by attracting advertisers with professionally produced videos and new kinds of ads. It now says it has 800 million unique views worldwide a month. Analysts estimate that YouTube contributes more than $1 billion to Google’s annual ad revenue and is most likely profitable.

But YouTube, now six years old, is still in the early stages of making money. Advertisers spend just $2.2 billion on all online video ads, compared with $60.5 billion on television ads, according to eMarketer, a research firm, and ad agencies are only now hiring people with expertise in online video. According to an estimate by Citigroup, YouTube will contribute 5 percent of Google’s total annual revenue in 2011.

“For big branding campaigns, TV is always going to be a huge part of it,” said Michael Tabtabai, integrated creative director at Wieden & Kennedy, the ad agency. “But a lot of brands are taking risks, putting money in places they may not traditionally have chosen.”

To earn a larger share of television ad dollars, the biggest prize in advertising, YouTube has to recruit new kinds of advertisers, beyond the music, entertainment and technology companies that have flocked to the site, and convince them that YouTube is a fruitful place for brand building.

And Google, which got its start and still makes the vast majority of its money from search ads — a few lines of text that invite a direct response — has to learn how to work with advertisers who want to sear their brands into the minds of Internet users.

YouTube’s latest step in that direction is the hiring of Watson, Procter & Gamble’s former head of digital business strategy, who in June became YouTube’s first vice president of online video global sales.

By hiring Watson from Procter & Gamble, YouTube acquired expertise in consumer-packaged goods, a sector that has been slow to online video advertising. Video ads for one of Procter & Gamble’s brands, Old Spice, were a viral success online last year.

Watson said that all ads on YouTube would eventually be video ads for brands. Unlike television, YouTube incorporates social elements by inviting viewers to choose whether they watch, share or create their own videos about advertisers’ products. And YouTube, he said, had both global reach and the ability to target an ad to 20-something men who live near a pizza shop.

Still, YouTube has a small window of time to capitalize on that ability, because as Internet-connected televisions, including Google TV, become more popular, television will also be able to show personalized ads.

“It has an advantage now because it’s serving up one stream for one person and knows who that person is in most cases, but the other big networks are getting there,” said Jim Louderback, chief executive of Revision3, the Internet TV service. Even though YouTube is showing more professional videos so brands can avoid appearing next to unsavory homemade videos, advertisers still hesitate to spend as much on YouTube as they do on TV, said Benjamin Palmer, chief executive of Barbarian Group, a digital marketing agency.

“The production value on YouTube on average is way lower than it is on television,” Palmer said. “It’s hard to justify spending millions of dollars running a Web spot that has helicopter shots and explosions when your ad is sitting next to something shot on a two-year-old cellphone.”

Conversely, a company's cheaply produced but direct and effective video stands an equal chance  of pairing alongside more expensive and professionally produced spots, dependent on the search query and what is trending on Youtube on any particular day.

Still, YouTube is willing to experiment with new types of advertising that could never appear on television, Palmer said, like a live-streamed ad campaign that he is working on, choose-your-own-adventure videos or user-created ads.

GoPro, which makes mountable cameras for taking pictures while doing active sports, trolls for videos shot with its camera on YouTube and, with the users’ permission, edits them to show on its YouTube channel and in its online and TV ads. One video, watched six million times in two days, showed a buck leaping across a mountain biker’s trail in Africa and knocking him to the ground.

“The content ends up selling the cameras,” said Stephen Baumer, GoPro’s chief technology officer. “These consumers, to our delight, are advertising on our behalf.”

Dodge ran a campaign for its Journey vehicle that started on television and asked viewers to go to YouTube to get clues to hunt for hidden cars and find the cars in the real world. Then it posted videos of the car winners on YouTube.

“What YouTube has done in the last year is open up the platform to you as a brand to use any kind of technology and ask people to become part of the story,” said Tabtabai of Wieden & Kennedy, which worked on the Dodge campaign. “We’re really just scratching the surface.”

In addition to brand development, Michael Miller, author of YouTube for Business, recommends eight simple, basic ideas that small businesses can use to market on YouTube:

1. Building Your Brand. Rather than trying to sell individual products, you might simply focus on building your overall brand.  For example, you should try to focus on selling the Nike brand name rather than attempting to sell the AirMax+ men’s running shoe..

2. Product Advertising. You may choose however to focus on a specific product in your brand.  For instance, push the specific product Monster Energy Drinks, rather than the general brand that produces it Hansen’s Natural Soda.

3. Retail Promotion.  A tour of the company’s retail store highlighting some of the best selling or most important company products is a great way to drive traffic both online and off at the retail level for your store.

4. Direct Sales. Record a tutorial of how to use the company product.  Many customers need to see a product in action before purchasing on the website.

5. Product Support. Create a product support FAQ video for your customers.  Providing product support online is a much more attractive alternative for customers than waiting on hold for a customer service representative and much easier than trying to dig through a site’s “knowledge base” for the answer.

6. Product Training.  Gone are the days of flying across the country for sales training and seminars.  Save money by uploading training videos easily accessible for all employees.

7. Employee Communication. Another way to save time and boost productivity is to hold company wide meetings through a private YouTube channel.  It’s more convenient and far more efficient for your employees.

8. Recruiting. Attract talented and potential new employees who might not otherwise notice the company with a YouTube video highlighting the benefits of working for the company.
 

Visit APRO's YouTube channel here.