YouTube’s Kids and Family category is a bit of an anomaly.
The category boasts some of the world’s most-watched accounts, week in, week out. But it’s also perhaps the most under-monetized part of YouTube.
For YouTube, this is a perfectly acceptable state of affairs. Kids’ content provides whopping engagement stats and establishes new generations of viewers. For kids’ media companies, though, YouTube is an intransigent opportunity – the golden goose that will not lay an egg.
Which explains the launch on Wednesday of LUMEE, an ad sales house and 50-50 joint venture co-formed by Animaj, a European production company for kids’ content on YouTube, and Hasbro, the toy and media giant that includes brands like My Little Pony, Peppa Pig and Transformers.
The YouTube advertising flywheel may really fly for accounts in other categories, where advertisers aren’t heavily regulated and restricted. But for Animaj, which operates preschool and early child IP in Spain, Latin America and Central Europe, there are tens of billions of views per year, but the revenue per view lags.
The company’s ability to generate billions of views “doesn’t mean anything if you’re not able to monetize them,” Animaj co-founder and CEO Sixte de Vauplane told AdExchanger
“We met around this same idea,” said de Vauplane of syncing up with Hasbro last year. “That YouTube monetization is not mature enough.”
How LUMEE works
LUMEE is a combination of Hasbro’s premium brand and owned media, as well as Animaj’s IP and AI-generated content production capabilities. The two companies co-own the startup 50-50.
Animaj also brings intimate knowledge of the YouTube Kids and Family category. Greg Dray, an Animaj co-founder and former global managing director of YouTube Kids, will lead LUMEE.
The new ad sales house will pitch brands and agencies with a portfolio of inventory. In addition to YouTube content, LUMEE has exclusive access to inventory in FAST channels created by Hasbro (like one that streams an endless run of Peppa Pig episodes) and on-demand streaming content.
For kids’ media companies, consolidated scale is critical, de Vauplane said, even for a company with as desirable a set of brands as Hasbro. To comply with COPPA and YouTube’s own policies on Kids and Family advertisers, there is no user-level targeting of this type of content. That means advertisers in this category must keep their campaigns within owned-and-operated media channels and can’t extend their reach by targeting those same YouTube viewers elsewhere around the web – a common popular tactic for YouTube ads.
COPPA and YouTube polices also push advertisers to blanket kids’ content with no contextual knowledge, de Vauplane said. There is no distinction between targeting shows for different ages, or genders or interests. An advertiser targets “kids.”
Via the LUMEE managed service, Animaj’s and Hasbro’s respective content can be curated more effectively from across the network of IP based on the specifics of the product or brand being advertised, he said. A campaign for an upcoming movie release, for instance, might target content around animals and animal themes, around cars and transportation content, or singalong songs.
LUMEE is also a sponsored content production company that uses generative AI. Advertisers can show up with their own creative and an idea for a campaign. But there are many opportunities where it takes a finger on the pulse of childhood media trends and the ability to generate video on short notice.
Trends on TikTok or YouTube pop up quickly. But they disappear just as quickly, de Vauplane said. There is a cyclical craze of slime videos, for example, he noted. Posts of people creating and working with goop will all of a sudden go super-viral. After a week or two, the trend recedes.
Part of LUMEE’s pitch is to seize these short-window opportunities by leaning on AI-generated ads and content integrations that lean into the trend.
Pocoyo, a Spanish-language preschool brand owned by Animaj, had a super-trendy moment with a dance from one of its videos. “But as an advertiser, it was complex to ride the wave of that trend,” de Vauplane said.
There may be hundreds of millions or billions of views for a viral hit. But “content production becomes the bottleneck,” he said. With LUMEE, there should be more ways for advertisers to seize those opportunities with quick-turnaround creative.
The guardrails for kids’ ads
The goal with LUMEE is to unlock the Kids and Family category to more advertisers and increase the deflated CPMs for kids’ content on YouTube. Advertisers will also have whole new ways to integrate their content into respective IP.
But there is still a high bar when it comes to ads created for little children.
For example, a quick-serve restaurant might want to feature Peppa Pig and family eating at a location, say, or the Transformers crew at the drive-thru. That is part of the LUMEE offering, de Vauplane said.
“But on a case-by-case basis,” he added.
Hasbro and Animaj both retain control over the types of advertisers and sponsored integrations that will be available, he said. But those types of direct integrations, like if a retailer wanted to pay to feature its storefront within organic Pocoyo posts and/or features Pocoyo characters in its own ad, will be reserved for larger clients and deals.
By the way, Pocoyo is a popular Spanish-language program for preschool ages.
And while Animaj may be open to advertisers integrating into Pocoyo content and leveraging its IP, Hasbro can nix any potential use of its brands by a LUMEE advertiser.
After all, de Vauplane said, it would only take a few months for such sponsored integrations to “saturate” the content and probably damage the trust of parents. It is not like advertisers are going to be able to use Transformers or Peppa Pig characters and integrate into that content, at least not without Hasbro’s explicit say-so, he said.
However, de Vauplane added, “we want to provide to advertisers the ability to use the iconic brands that we have in order to find ways to leverage those brands in a very organic way.”
