There is a huge problem with advertising on YouTube, and one of the site's biggest networks has a plan to fix it
This environment means YouTube ads make far less money than cable TV ads, which give advertisers more power over the content that appears with their ads.
For a YouTube network like Machinima, which already splits its ad revenue between YouTube and its partner YouTube creators, those slim margins can make for a difficult business model.
Over the last year and a half, three former television executives - CEO Chad Gutstein, CRO Jamie Weissenborn, and CCO Daniel Tibbets - have been brought into the company to change those margins. They're looking towards television's business model to do so.
"When you think about how traditional media is sold and why it has the value it has, it is because brands want to know what they are advertising around," Weissenborn told Business Insider.
Machinima serves a core audience of 20-something lovers of video games, comic books, and other aspects of "fandom" culture.
To corral some of YouTube's "wild west" quality, Weissenborn and Tibbets have been building out an editorial calendar that includes upcoming events important to the Machinima community like E3 and Pax Prime and new video game, movie, and television releases.
The team is then working with their in-house talent, as well as their 32,000 partnered YouTube creators, to develop content around those events and releases. Tibbets and Weissenborn hope that by doing so they can take some of the guesswork out of advertising campaigns on YouTube.
"When we work with talent to create a particular show or programming schedule, suddenly, you can pitch brands. We can say, 'This is what this YouTuber is doing over this period of time that we think will be really interesting to you as an advertiser,'" Tibbets explains. "Suddenly, what we do becomes more tangible to advertisers."
Additionally, Machinima is trying to take the guesswork out of YouTube advertising by building shows they can sell sponsorships on. A prime example is "Away From Keyboard," a reality show featuring Machinima-partnered YouTube stars that was originally sponsored by Geico, but has since been taken over by Acura.
"The value of ["Away From Keyboard"] is that advertisers know exactly the show that they are getting and the talent benefits by being in the show … Using that, we can tell brands that, like television, we'll be doing this show in October or this show in December," Weissenborn says.
According to Weissenborn, the strategy has been working. In recent months, the team has been able to sell campaigns topping $1 million-$1.5 million. A few years ago, that deal size would have been unthinkable for Machinima.
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