Media buying giant Magna Global said it has entered the largest-ever deal with YouTube's Google Preferred and will shift $200 million in advertising dollars from TV to digital video as part of a deal with $250 million in total .
Google Preferred puts advertisers into videos from the most popular YouTube creators. In year one, Magna clients will spend nine figures on Google Preferred. Years two and three will continue to provide efficiencies and value for clients while also focusing on an innovative learning and measurement partnership as Magna seeks to understand the optimal mix and usage of digital video with other marketing channels (like linear television), the agency said.
Magna said it made the move because consumer usage of linear TV is on the decline. The erosion has been focused on young adults and teens but lately has spread to older viewers as well.
As viewership has gone down, the price of TV commercials has been going up. Magna estimates TV inflation to be in the high single digits.
"We believe marketers deserve better: Better measurement, better data, and a better explanation than 'you are going to have to pay more for less' (again) in this year's marketplace," a Magna spokesman said.
Overall Magna predicts that digital spending will top total television spending this year.