There's a new model of advertising that bridges TV and social media - and it could shake up the industry

YouTube

YouTube influencers enjoying some BK

• The German media conglomerate ProSiebenSat.1 Group is packaging TV ad space with YouTube inventory, including ads on top influencer channels.
• ProSiebenSat.1 Group acquired the YouTube production company/ad firm Studio 71, which provides the broadcaster with a unique ability to craft such deals.
• The thinking behind these YouTube-plus-TV ad packages is that marketers can better reach young, TV-avoiding audiences, and find "brand safe" networks of digital influencers to partner with. 
• Such tactics have yet to catch on in the US.

Advertisers have had to effectively hit the pause button on YouTube thanks to 'brand safety' issues such as ads running next to hate speech or creepy videos featuring kids in peril.

Many of these companies aren't sure what to do next, since not advertising on YouTube - which reaches a whopping 1.5 billion people a month - isn't tenable for brands that want to reach young people.

TV's relationship with YouTube is different in Europe

German media giant ProSiebenSat.1 Group says it has found a solution, by tying YouTube and TV at the hip.

That can mean producing digital offshoots of TV shows that run on the ProSieben broadcast network such as "The Voice" for YouTube, and then selling TV-plus-web packages to advertisers. 

In other cases, ProSieben and its subsidiary Studio71 have created ad offerings that include a mix of TV ads, ads on the TV networks' YouTube channels, as well as ads on other YouTube influencer channels - channels that have been reviewed by the company and deemed "brand safe."

In other words, a big traditional TV network is cherry-picking YouTube talent, and selling ads for it along with its own highly produced shows - creating something along the lines of a vetted YouTube ad network.

Nikolas Hoenig, director of strategy and business transformation for the ad-buying agency Starcom in Germany, said his clients spent 25% more of their budgets with digital influencers in 2017 versus last year, and he expects similar growth in 2018.

Over the past year, those budgets have gone toward TV and YouTube combinations- which check off two boxes for marketers. They help get brands' ads in front of people who don't watch as much TV, and they make clients more comfortable with working with digital talent.

"You reach these young people much more easily in digital, which is more obvious," Hoenig told Business Insider. "What's less obvious is that you can extend the storyline from TV shows using influencers."

That said, Hoenig said discussions about whether influencers are safe for marketers "comes up on every campaign." These type of elaborate partnerships with YouTube stars ideally promise "greater professionalization," he said.

Perhaps surprisingly, this is not happening in the US, where broadcasters have been seemingly more inclined to exploit YouTube's ad challenges.

Burger King sponsors Völlkerball 

Here's what this kind of TV/web integration can look like. Last year, ProSieben (not unlike a German version of NBC) put together a sponsorship deal anchored by a reality TV dodgeball competition dubbed "Völlkerball Championship." Burger King Germany signed on to sponsor a team comprised of seven popular digital influencers, including KSFreak and Krappi.

These YouTube stars produced behind the scenes videos chronicling their preparation for the völlkerball event, while also weaving some Burger King messaging into their videos.

The program culminated with Burger King ads being featured in a live Völlkerball battle that aired on the ProSieben network in Germany, which is popular among younger viewers.

Here's one of the videos:

A big German TV player has invested in selling YouTube

To be sure, ProSieben is well positioned to exploit such TV and web connections.

In 2015 the German media conglomerate purchased a controlling stake in the YouTube-centric programmer/ad sales company Collective Digital Studios, which it soon renamed Studio71.

Then earlier this year Italy's Mediaset and France's TF1 also took stakes in Studio 71, bringing its valuation to $425 million.

So those connections gives ProSieben and Studio 71 the ability to create TV plus YouTube ad packages in a growing number of countries. And they can bring them to both traditional television advertisers as well as more digitally inclined brands.

Sebastian Romanus, managing director, Studio71 Germany, pointed to a program enacted for "The Voice Kids" in Germany that has generated 500 million views on YouTube to date.

Given the current skittish attitudes among advertisers when it comes to the wilds of digital media, "it's a relative easy pitch," Romanus said. "Our creator content is never less than brand safe. We screen the content that our creators put online, so we can guarantee it."

Brand safety will cost you

Here's the downside: this isn't cheap, and it's labor intensive.

As Reza Izad, cofounder and CEO of Studio 71, explained it, the company puts a fair number of people and technology behind making sure these guaranteed brand safe deals stay safe.

These folks search through YouTube influencers' videos' close-caption transcripts, meta data, and titles, taking automated screenshots and looking for bad language or hot button topics such as politics or mental health challenges.

Those are these steps needed these days, even if the system is far from perfect.

"What advertisers want are clean, well-lit places, and they want to buy attention," said Izad. "In two years or so, Google's computers are going to be super smart [so we won't have to worry as much] but not yet. So we have a lot of people on this."

"It is massively costly," he said. "But it's the only way to do it."

Will it happen in the US?

The question is, when might we this kind of synergy happen in the US?

For some ad buyers, this sort of offering would be welcome. Yet other ad buyers see these deals as potentially costly compared to just running ads across the whole of YouTube - despite the brand safety minefield that invites.

Meanwhile, top TV giants in the US continue to view YouTube as small potatoes. And they probably don't want to get involved with playing brand-safety police on YouTube, given the politics.

Lastly, many TV networks that do have a significant YouTube presence may not want to have anyone else sell their YouTube ads. YouTube is massive, fragmented, and can be territorial.

Still, the ProSieben/Studio 71 model may have legs. The companies are looking to expand into Italy, France, and even Latin America, according to Izad.

More examples of digital + TV synergy across the pond:

Here's another: