When the operational cost of running its own site and apps proved too expensive for Vevo – on top of paying music labels for TV airing rights – it turned its top competitor into its core distribution channel.
Vevo shut down its owned-and-operated online platforms between 2018 and 2019 and made YouTube its home.
But although Vevo may still be primarily known for its music videos on YouTube, the service, which is a joint venture co-owned by Universal Music Group and Sony Music Entertainment, is prioritizing monetization through streaming distribution. Which means getting its TV channels onto more platforms beyond YouTube.
Vevo launched its streaming app on Android TV last year and put free ad-supported TV (FAST) channels onto Philo in May. Its app is also available on Roku, Samsung and Apple TV.
“A ubiquitous distribution strategy [creates] much more commercial value from music videos,” said Kevin McGurn, Vevo’s president of sales and distribution.
When McGurn joined the company in 2017, nearly all its viewers were on YouTube. Today, Vevo has diversified its distribution to the point that half of its audience is watching Vevo content somewhere other than YouTube, he said.
The more scale a content owner has, the more ad inventory it has to monetize.
McGurn spoke with AdExchanger.
AdExchanger: Why is Vevo so focused on TV distribution rather than social?
KEVIN MCGURN: Social media platforms are not very profitable places to run a video content business. They’re essential promotional vehicles for the artists, but, for us, TV far exceeds social media in terms of viewer engagement based on session length and profitability from advertising.
Speaking of profitability, how is distribution making monetization possible?
As a joint venture, we have to run a very tight business that’s profitable based on very thin margins and high scale. The key for us was getting that scale. It lets us ride the rising tide of FAST channels and programming distributors.
How much ad inventory does Vevo have to share with its distributors?
We control a majority of Vevo’s ad inventory as the content owner. Most of our distribution deals give us 80% of the inventory and, overall, that share is never below 70%. Where we rely on programmers is for audience data because they have the more direct relationships with consumers.
How can you ensure consistency in ad serving with so many distributors?
Generally speaking, TV wildly lacks standardization in ad delivery and measurement.
On the ad serving front, it helps that we have a centralized ad server for YouTube and non-YouTube inventory. We use Google Ad Manager for YouTube and FreeWheel for the rest of our TV inventory.
With that level of consistency, we’re able to guarantee reach on our deals using Nielsen numbers, which also helps with frequency capping. Our distribution is wide enough that the average campaign frequency is 2.5 [per viewer].
Sometimes advertisers ask to increase frequency, though, which we can do by limiting reach.
What about measurement?
We look for companies with automatic content recognition [ACR] to get consistent reporting across distributors. We also work with TVision to determine how many people were in front of a screen when an ad ran and whether or not they were paying attention.
Co-viewing is really important to our measurement strategy, but the main goal is figuring out how to measure across TV walled gardens – and ACR is the best way to do that.
This interview has been edited and condensed.
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