YouTube Leads Consumers Down the Funnel

When consumers use YouTube, the main economic benefit to YouTube is a couple dollars from an advertising exchange. To improve its profit potential, the streaming service has partnered with TicketMaster to integrate complementary services and upsell the consumer.

While consumers browse through content on YouTube, they might land on a singer they happen to really like. Being ever so helpful, YouTube knows that the singer will be going on tour so it suggests the closest concert near the user. This is a great strategy on many levels. First, YouTube is certain that this is the singer’s target audience because a singer’s target audience for concerts are all those that enjoy the singer’s songs. As a result, targeting costs are reduced because consumers are explicitly announcing their interests. Second, this promotion costs very little. All the costs involved are coding the program to sort the events with the nearest show at the top of the list. Finally, this upselling is rather tame. It’s not in your face. Instead, it’s a simple button that the users presses only if they decide to do so. This serves to improve customer experience instead of bombarding the consumer with ads that it might not even be interested in. If the user is converted, YouTube benefits from a referral commission, Ticket Master benefits from the potential of increased sales and the consumer benefits from the awareness of a fun activity that they might not have found otherwise.

There are of course a couple limitations to this approach. First, most of the fans that are interested in a singer are aware of when their favorite singer is going on tour. So, in this scenario, it does little more than simply provide a convenient way for a fan to buy their ticket, where Ticket Master loses some profits due to YouTube’s commission fee. Second, if it happens to be someone who just discovered the artist, what’s to stop the user from searching for the concert on Google instead of clicking on the link? If it were me, I wouldn’t want my streaming experience to be interrupted. Instead, I would just take note of it and then search for the concert later. In this scenario, YouTube loses its referral commission and Ticket Master gains a customer for free.

What are your thoughts about the service? Have you seen it before? Would you use it?

Leave a Reply