Youku Tudou Case Study

HONG KONG: Youku Tudou, the video-streaming site owned by internet giant Alibaba, is losing adspend to competitors like Weibo, as brands prioritise short-form video platforms.

Chinese viewers still spend more time than anyone else watching online video, the Financial Times reported, though Danielle Bailey, head of Asia Pacific research at agency L2, told the paper that the trends in online video are beginning to move in other directions.

Youku Tudou is currently China's top video site with an estimated 500m monthly active users; for context, competitor Weibo, which is much like the micro-blogging service Twitter, has 340m.

The key trend of livestreaming, Bailey said "is dominating". She added that viewers are also flocking to "Vine-like videos where people and brands can produce content".

But despite the much-hyped rise of livestreaming in China, figures from iResearch revealed that on average, users continue to spend around four hours a month watching short videos, more than twice the hours spent on livestreaming.

And this trend toward short video appears to be hitting Youku Tudou. Data from L2, for example, show that, of the 75 global luxury brands tracked, the proportion which maintain an active brand channel on the site is down 16 percentage points in one year.

Furthermore, the YouTube-style service is losing out to platforms like Tencent's WeChat and Weibo, which Alibaba part-owns (31%).

Pre-roll ads do feature on some videos, but livestreaming has skewed toward integrating a commercial element into the content – hence the popularity of livestreamed fashion shows and celebrity clips. And a sign, said Bailey, of China's sophistication about connecting commerce.

"The end of all their digital roads leads to commerce in a way that does not happen in the West."

While Alibaba denies any decline in ad revenues or active accounts, Youku Tudou lost RMB 1.7bn last year. For smaller platforms, such as Miaopai, an emphasis on short-form has seen a boost in views as it fills the gap left by Youku.

L2 observed that, in like-for-like branded videos posted between December 2016 and April 2017, "Maiopai's advantage over Youku is clear … 73,700 more views per video".

Data sourced from Financial Times, Tech In Asia, L2; additional content by WARC staff

Samsung becomes the first brand to jump onboard

BEIJING and LONDON – November 2nd, 2015 – Youku Tudou, Inc. (NYSE: YOKU), a leading multi-screen entertainment and media company in China (“Youku Tudou”) and Mirriad Advertising Ltd, a global leader in native, in-video advertising, have entered into a long-term exclusive collaboration arrangement in China, the world’s second-largest advertising market.

 

In this alliance, Youku Tudou will connect Chinese and international brands with Mirriad’s award-winning technology on its platform, enabling these brands to reach China’s fast-growing consumer base through digitally embedded brand advertising in highly popular premium original content. China continues to be one of the most attractive markets for consumer brands, as it is expected to be the world’s largest retail market by 2018, while three-quarters of the urban population is projected to qualify as middle-class by 2022.

 

Mirriad’s patented technology will offer Youku Tudou a vast number of new, premium advertising opportunities within its entertainment and media ecosystem (by way of ad units featuring brand integrations inserted after the content is shot). Mirriad’s patented NIVA (native in-video advertising) technology enables advertisers to digitally insert their brands into video content through products, signage, video and other branded assets at scale. Through the new collaboration arrangement, Youku Tudou will utilize Mirriad’s suite of marketplace applications to create new, prime ad inventory immediately at scale, providing content owners and distributors with editorial control over brand integrations and overall ad operations.

 

“We are pleased with this exclusive partnership, the first of its kind in China and at the cutting edge of innovative trends in advertising. Working with an industry leader such as Mirriad allows us to further our efforts of placing digital advertising directly into content; empowering advertisers and content owners to enhance relevance, context and effectiveness without detracting from the narrative,” said Edward Su, Chief Operating Officer, Youku Tudou.

 

Mark Popkiewicz, CEO, Mirriad, agreed, “We look forward very much to collaborating with Youku Tudou to bring this technology to China for the first time. This agreement is not just strategically significant to us – it paves the way for advertisers to benefit from NIVA technology on one of the world’s largest distribution platforms and sets a global precedent. We anticipate that our work with Youku will provide the foundation for a new and exciting era of in-video advertising across the globe.”

 

“The Chinese market offers immense opportunities and challenges for brands looking for the best ways to reach its highly desirable consumer base,” said Michael Rees, Asia-Pacific Vice President, Mirriad. “It is no secret that the Chinese market has its own uniqueness which makes finding the best local partner all the more crucial, and we are delighted that our digital technology will enable Youku Tudou to offer innovative advertising opportunities to brands at scale. Research shows that in-video advertising is twice as likely to be recalled as traditional forms such as pre-roll, and it offers a seamless experience for the consumer.iii  Everyone wins: the viewer, the advertiser, the content creator and the channel.”

 

The first Mirriad campaign on Youku appears within talk show Life & Fate and features electronics giant Samsung as the inaugural brand to capitalize on this new opportunity. The campaign launched on Monday 19th October and features Samsung throughout 6 episodes over a 2-week period.

 

This announcement builds on Mirriad’s global strategy of partnerships with Universal Music Group (UMG) the global music leader, Havas, the multinational advertising and Public Relations company, and Cheil Worldwide, a leading South Korea-based marketing solutions company.

 

About Youku Tudou Inc.

Youku Tudou Inc. (NYSE: YOKU) is a leading multi-screen entertainment and media company in China. Youku Tudou is China’s leading online video platform, enabling users to search, view and share high-quality video content quickly and easily across multiple devices. Its Youku brand and Tudou brand are among the most recognized online video brands in China. Youku Tudou’s American depositary shares, each representing 18 of Youku Tudou’s Class A ordinary shares, are traded on the NYSE under the symbol “YOKU.”  

 

About Mirriad

Mirriad’s pioneering video technology revolutionizes advertising for the skip generation – the generation of consumers from six to sixty who now bypass traditional video ads. Its technology integrates products and signage into professionally produced content, such as TV programming and music videos, creating ads that look authentic and contextual. Brands and their agencies use Mirriad to manage and run multi-title campaigns, media-planned and tuned for reach and frequency in exactly the same way they currently buy advertising that appears outside the content.  

 

Mirriad turns premium content into premium inventory. These Native In-Video Ads have been extensively researched around the world by the likes of Nielsen and proven to achieve outstanding increases in awareness, brand sentiment, and intent to purchase. Mirriad currently operates in more than 20 countries and works with many of the world’s leading content owners, broadcasters, distributors, ad agencies, and brands. In 2013 this technology won an Academy Award for technical achievement. Last year, it was Innovation Award finalist at Cannes Lions and in May 2015 awarded Cool Vendor 2015 by Gartner.  For more information, please visit: www.mirriad.com

 

Media Contacts:

Youku Tudou Inc.

Jay Chen

+8610 5890-6883 x 8338

jaychen@youku.com

 

Chang You

Youku Tudou Inc.

+8610 5890-6883 x 8056

changyou@youku.com

 

Berkeley PR for Mirriad

Nick Head

+44 118 909 0909

mirriad@berkeleypr.co.uk

 

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