Magna Global, which buys ads for Johnson & Johnson, Coca-Cola, Fiat and others announced at NewFront that they have agreed to buy $250 million in video ads from YouTube.
But that’s not the story, it’s that Magna is shifting these ad dollars from its clients TV budgets.
This shift is something that has been predicted for a while and it may finally be happening as the reach and capability of online video has matured, especially on platforms such as YouTube, Facebook and Instagram. As Facebook founder Mark Zuckerberg has famously pointed out, its audience size is the equivalent of three Super Bowls happening every day.
Per the Wall Street Journal, David Cohen, president of Magna Global North America commented, “We have negotiated a meaningful share shift from linear television to digital video”.
That’s big news and could be the beginning of a trend that should raise the hairs on every TV ad executives neck. Online video already has the reach and eyeballs, it has the data on behavior and often can target based on specific individualized information such as job title, location, income and what products and services a person has been looking at buying. This is something that TV can’t currently offer, but they are working on that capability via internet connected TV’s. Unfortunately for them, the television based ad platforms connected to the internet and therefore the data are years from mainstream adoption and implementation.
Online video on the other hand… has that data now.