This Thesis Has Been Approved by the Honors
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This thesis has been approved by The Honors Tutorial College and the Department of Business Administration ______________________________ Professor Daniel R. Dahlen Professor, Marketing Thesis Adviser ________________________________ Dr. Raymond Frost Director of Studies, Business Administration ________________________________ Dr. Cary Roberts Frith Dean, Honors Tutorial College 1 #Ad: How YouTube Went From “Broadcast Yourself” to Broadcast Brands and Why It Matters ____________________________________ A Thesis Presented to The Honors Tutorial College Ohio University _______________________________________ In Partial Fulfillment of the Requirements for Graduation from the Honors Tutorial College with the degree of Bachelor of Business Administration ______________________________________ by Allyson Lagiovane May 2018 2 Acknowledgements First, I would like to thank my thesis advisor, Professor Dan Dahlen. Not only has he been an invaluable resource in support of this project, he has been a great mentor to me throughout these past two years of working together. I could not be more thankful for the guidance and encouragement he has given me, both academically and professionally. A special thank you to those that participated in the in-depth interviews portion of my research, including Chris Ferrel, Bo Reisinger, Danny Veech, Cheryl Harrison, Nina Bressau, and Tracey McCormack. Thank you for taking the time out of your busy schedules to speak with me and share your insight. As well, thank you to those students that participated in the online survey and contributed to my research. This research wouldn’t have been possible without your support. I could not be more thankful for the Honors Tutorial College and the opportunities that they have provided to me throughout my undergraduate career. Words can’t express how grateful I am to be a part of this program and to be a part of a group of amazing people that continuously push me to work harder and follow my passions. And as always, a huge thank you to my family and friends for their unwavering support throughout the process of writing my thesis. Thank you for helping me through the struggles and being there to celebrate my successes. I am the person that I am today because of you. 3 Table of Contents Abstract ………………………………………………………………………….... 5 Introduction ……………………………………………………………………...... 6 Literature Review The Birth of YouTube ……………………………………………………. 8 YouTube Today …………………………………………………………... 10 YouTube Applications ……………………………………………………. 12 Advertising on YouTube …………………………………………………. 15 Rise of the YouTuber ……………………………………………………... 18 Competitive Landscape …………………………………………………... 20 Challenges for YouTube’s Future ……………………………………….. 23 Research Approach ………………………………………………………………. 26 Study 1: Impact of YouTube on Businesses Research question ………………………………………………………… 26 Methodology ………………………………………………………………. 26 Results and Discussion …………………………………………………… 29 Limitations ………………………………………………………………… 38 Study 2: Impact of YouTube on Millennials Research question ………………………………………………………… 39 Methodology ………………………………………………………………. 39 Results and Discussion …………………………………………………… 40 Limitations ………………………………………………………………… 46 Recommendations & Future Research ………………………………………….. 47 Afterword: My Journey ………………………………………………………….. 49 Appendices ……………………………………………………………………........ Appendix A: Interview Script ……………………………………………. 51 Appendix B: Chris Ferrel Interview Transcription ……………………. 52 Appendix C: Danny Veech Interview Transcription …………………... 59 Appendix D: Bo Reisinger Interview Transcription …………………… 64 Appendix E: Cheryl Harrison Interview Transcription ……………….. 68 Appendix F: Tracey McCormack Interview Transcription …………… 71 Appendix G: Nina Bressau Interview Transcription …………………... 76 Appendix H: Study 2 Survey Results ……………………………………. 78 References …………………………………………………………………………. 95 4 Abstract YouTube has grown from a platform to merely host video content into a brand powerhouse growing revenue for large corporations and independent content creators. This thesis analyzes previous literature to understand the growth and development of YouTube and where YouTube stands in the current marketplace. This thesis also combines both qualitative and quantitative primary research methods in order to understand how YouTube has impacted business strategy and millennial attitudes. Specifically, the study aims to answer two major questions: 1. How do advertising professionals view the importance of utilizing YouTube for their company, how do they approach ads and sponsored content, and what are the implications of that? 2. How do college-aged millennials interact with YouTube and view sponsored content, and what are the implications of that? Each research question was answered through different research methods. The first question was explored through in-depth interviews, specifically with advertising and marketing professionals. The second question was answered through an online survey geared specifically to college-aged millennials at Ohio University. The only way to leverage video content as a medium for growth in business is to gain a well-rounded understanding of how it works, how people interact with it on a daily basis, and how it affects consumer perceptions. By gaining insight into the YouTube community and the rise in sponsored and advertised content, marketers have the opportunity to tap into a new and growing trend to access a loyal audience. 5 Introduction YouTube has emerged as the second most viewed website around the globe, falling closely behind its parent company, Google. Video content grew so popular that Google acquired YouTube in 2006, just one year after YouTube was founded. Today, over 300 hours of video are uploaded to YouTube every minute and almost 5 billion videos are being watched each day. YouTube introduced the slogan “Broadcast Yourself” as a way to encourage the everyday person to put their life on film and host it on YouTube. Since the first video posted by one of YouTube’s founder, titled “Me at the Zoo,” billions of hours have been shared about makeup, gaming, technology trends, and everything in between. Monetizing content was implemented in 2007, and brands have taken advantage of the site’s profitability by partnering with popular influencers to access their audiences. The emergence of user-generated content, specifically through videos on YouTube, has drastically changed the way marketers advertise to their audiences. Today, YouTube’s landscape could be better explained as “Broadcast Brands,” as companies and creators are tapping into the world of YouTube advertising and sponsored content. Little research has been published in understanding the implications of brand- sponsored content and brand strategy specifically through YouTube. With such information, brands will more effectively be able to leverage YouTube as a way to authentically engage with users to foster a symbiotic relationship between the brand, the content creator, and the audience. The primary goal of this thesis was to gain a well-rounded understanding of YouTube and how it is viewed in the marketplace. This thesis seeks to delve into 6 literature surrounding YouTube’s history, current landscape, and competitors in order to understand where it stands in the market. This thesis also seeks to pair this understanding with results derived from primary research. The primary research conducted draws conclusions from YouTube’s two main user sets – businesses and millennials. By pairing key points derived from secondary literature with primary research trends about how users interact with YouTube, advertisers and business professionals can better understand how to leverage the platform. As well, YouTube, and ultimately Google, can tap into the findings about their user sets to understand how the market is viewing the platform, leverage its strengths, and develop tactics to address challenges the platform currently faces. 7 Literature Review The Birth of YouTube YouTube began in 2005 when three former PayPal employees, Chad Hurley, Steve Chen, and Jawed Karim, decided to develop a dating website (Holownia, 2017). While the idea of a dating site didn’t stick, YouTube evolved into a place where anyone could go to share video content. On April 23, 2005, Karim uploaded YouTube’s first video, titled ‘Me at the Zoo.’ The 19-second clip featured Karim at the San Diego Zoo with elephants in the background and it has since reached over 47 million views (Dickey, 2013). This pales in comparison, however, to some of YouTube’s most popular videos to date. Soon after its inception, YouTube’s first video hit one million views in September 2005. The video was a Nike advertisement that featured the famous Brazilian soccer player, Ronaldinho. This led to a $3.5 million investment from Sequoia Capital in November, which allowed YouTube to expand the bandwidth and launch out of beta mode (Holownia, 2017). YouTube launched its Content Verification Program (Content ID) in February of 2006 after NBC called for the removal of a video that featured a Saturday Night Live skit. This program would go on to be instrumental in taking down videos posted to the site that infringed on copyrights. It also led to a partnership with NBC in which YouTube promoted the fall TV lineup later that year. YouTube continued growing, and Google decided to acquire the site for $1.65 billion in October of 2006. According to Google at the time, it was “the next step in the evolution of the Internet” (Dickey, 2013). Following Google’s acquisition, YouTube launched its