NEW YORK: When investing in digital, media agencies have generally protected TV budgets at the expense of print, but falling linear TV ratings have led Magna Global to shift $250m from television to YouTube.
"In the past, we weren't taking a bite out of linear budgets for a number of reasons," said David Cohen, US president of Magna Global. "But really, over the last six months, we've been trying to knock down those barriers in earnest," he added in remarks reported by Ad Exchanger.
The deal is the largest upfront deal so far struck for Google Preferred – the top 5% of videos on YouTube in terms of both quality and performance.
As well as the increased reach of YouTube – it claims to reach more 18-49 year-olds than any TV network with just its mobile traffic – agencies can also utilise new ROI metrics that allow them to, for example, assess how digital ad exposures affect offline sales and brand lift.
Cohen also welcomed YouTube's moves to align more closely its premium inventory pricing with that of television.
"In year one of the partnership, we're clearly identifying what kind of inventory we want access to and what kinds of formats we want to run," he said.
"We realise this is a marathon, not a sprint, so as time goes on we recognize that there will need to be new opportunities we include."
Magna Global will benefit from "competitive rates" on Google Preferred's unskippable ad inventory over the next three years.
"There are lots of ways to access YouTube inventory that's not part of Google Preferred," Cohen added, "but this partnership specifically looks at the crème de la crème of inventory that we can be confident with as a television replacement.
US TV adspend is expected to rise 4.8% this year, much of which is due to the twin stimuli of the US presidential elections and the Summer Olympic and Paralympic Games. The growth follows an estimated 3.4% decline in TV ad expenditure in the US last year.
Data sourced from Ad Exchanger, Ad Week; additional content by Warc staff