At least one YouTube network has stolen advertising money from TV.
Royal Caribbean has pulled funds from its TV budget to sponsor two new series from teen-centric YouTube network AwesomenessTV.
"We did take money from our TV budget to do this," said Carol Schuster, senior VP-marketing worldwide at Royal Caribbean. She declined to say how much the brand is spending on the idea, but called it "a sizable investment."
Royal Caribbean spent $45.6 million on TV advertising last year, down 1% from 2012, according to Kantar Media. The brand spent $3.7 million on online display advertising in 20143, but that figure doesn't include digital video advertising.
AwesomenessTV has produced two shows for Royal Caribbean, the first of which will premiere on July 6. "YoMuscleBoi's Royal Caribbean Adventure" follows AwesomenessTV star YoMuscleBoii (aka Josh Levya) as he cruises around the Caribbean, doing things like riding a Royal Caribbean ship's surf simulator and trying his hand at the world's longest zip line over water. The second series is a scripted show called "Shipping Julia." Premiering Aug. 3, the six-episode series will tell a Romeo and Juliet-style love story set during a Royal Caribbean cruise.
That Royal Caribbean moved some TV spending online is less surprising than the particular target: a YouTube audience whose allowances don't exactly cover lavish trips. But teenagers influence their parents, Ms. Schuster said. "Teens are our sweet spot from a guest perspective," she said. "They really get the most out of our ships."
Beth Greve, chief revenue and partnerships officer at AwesomenessTV, said it differs from most YouTube networks by focusing only on teens. "There are others that might cross multiple demos or are about one piece of content like Tastemade. We can cover entertainment and fashion and beauty and scripted and music and know that's what teens are engaging with."
AwesomenessTV's network of YouTube channels attracted 7.98 million U.S. desktop unique viewers in May, according to ComScore. Ms. Greve said the network accrues roughly 1 billion views each month when factoring in Big Frame, the YouTube network it bought in April for $15 million.
$43.6B U.S. agency revenue
AwesomenessTV had another edge in getting Royal Caribbean's attention. DreamWorks Animation bought the company for $33.5 million last May with earn-outs that could add another $95 million to the deal.
"We went, 'Wait, Awesomeness is owned by DreamWorks, and we partner with DreamWorks. They're one of our wonderful partners aboard our ships. Not only do we know them, but we trust them. For them to have bought Awesomeness just said so much about Awesomeness," Ms. Schuster said.
Last week DreamWorks Animation CEO Jeffrey Katzenberg was more explicit about AwesomenessTV's importance to his company at an industry event. Asked whether his company would have looked for another way to get into online video if not for AwesomenessTV, he said, "I'm not sure we would have." AwesomenessTV CEO Brian Robbins is "a singular talent," he said.
AwesomenessTV generated $4.1 million in revenue for DreamWorks Animation in the first quarter of this year, according to the parent company's latest earnings report.
After Royal Caribbean's agency JWT pitched the idea of working with AwesomenessTV, Ms. Schuster had a conversation with Mr. Robbins that led to a series of meetings. AwesomenessTV execs visited Royal Caribbean's marketing team in Fort Lauderdale, Fla. And the brand execs reversed the trip to check out the network's Los Angeles office.
"It took on a life of its own," Ms. Schuster said. "Before we knew it, we were doing a series and a travelogue. And now we're talking about how do we take this down the road and go to Europe and other parts of the world."
AwesomenessTV has also created 30-second pre-roll ads for Royal Caribbean that will air across the network's YouTube channels. The ads were produced from footage of both shows.
Ad creation has become something of a side business for AwesomenessTV like other online video outfits such as BuzzFeed's video arm. Earlier this year it created a TV spot for Pepsi-owned Aquafina's Flavor Splash brand that featured pop star Austin Mahone and premiered during the Grammys.
And though AwesomenessTV has won some TV money from Royal Caribbean, the campaign that resulted may yet rebound into traditional media: Ms. Schuster acknowledged the possibility that Royal Caribbean might eventually run the 30-second pre-roll ads as TV spots.