The Stack Archive News Article

Vevo sees boost in advertising revenue after pursuing TV-like ad strategy

Tue 12 Sep 2017

Vevo, the dominant player in music video distribution online, is seeing a boost in audience numbers and advertising revenue.

The New York-based firm, which describes itself as ‘the world’s leading music video and entertainment platform’, has already earned nearly $200 million (approx. £151 million) in upfront ads this year.

It predicts overall ad revenue growth of 30% in 2017, which in part is attributable to artists such as Taylor Swift, whose music video for rebellious single ‘Look What You Made Me Do’ has garnered a 311 million views in just two weeks.

For companies such as Dodge and Flex Dry, that have adverts playing before the video on YouTube, that means serious levels of exposure to their ads. For Vevo, it’s a vindication of its new strategy to treat its business like TV advertisement sales rather than online sales.

That means selling ads upfront instead of digital advertising techniques like branded content, targeted ads and custom sponsorship. This is in response to the big ‘events’ that music videos have become, with resurgent popularity and major hype that surrounds popular or controversial artists.

This strategy has been pushed by Vevo’s chief sales officer, Kevin McGurn, who has been working at the firm since February. McGurn argues that Vevo’s huge audience figures mean it should approach advertising differently to others online.

He said: ‘We wanted to talk to TV buyers and sell ourselves like TV. We put our media inventory in the lead of our sales.’ Given a difficult business model, in which the company has to share profits with Google-owned YouTube, as well as record companies, its strategy appears to have been successful, seeing revenue growth in eight out of the last nine quarters.

It has developed its own app and any views it gets on its website gain a larger portion of the profits. But it spends most of its time and earns most of its money on YouTube, and its new TV-esque advertising strategy is disrupting the e-commerce landscape.


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