YouTube Celebs Go Nuts with Product Placement

PQ Media forecasts U.S. spending on product placement in traditional media to be more than $26.5 billion this year. Online meanwhile, YouTube celebs are starting to make serious money producing commercials in their bedrooms or back yards.

TubeMogul estimates that at least 10 YouTube personalities earn more than $100,000 a year from ads and sponsorships. Two-year-old Tadcast has seen considerable success connecting big brands with these alternative creatives, while making sure brands are handled with care.

The result is often a YouTube video that garners millions of views and hundreds of thousands of comments, thanks to the creatives’ star power.

“These guys have dedicated fans. When you let them make what they want to make and give them the creative power to incorporate the brand in their own voice, their fans very frequently like it and say so,” says David Parker, Tadcast founder and CEO.

Tadcast says it provides product placement, but the videos are often full-length commercials for the Tadcast client. For example, YouTube personality Brittani Louise Taylor dressed up in a pistachio costume and rapped about how much she loves the nuts. A contest offering an iPad and a year’s supply of pistachios generated more than 276,000 comments.

And, if you don’t understand why more than 2 million people have watched a three-minute conversation between a talking orange and a handful of nuts, well… you’re not in the demo.

The Tadcast spots are just the latest in Wonderful Pistachios’ cool hunt. The brand has been cultivating an offbeat image with TV commercials featuring Jersey Shore’s Snooki and disgraced Illinois governor Rod Blagojevich. It has also embraced digital experimentation, offering an iPad app powered by Stickybits.

Tadcast could be in the right place at the right cultural moment, with the YouTube celebrity system beginning to generate big bucks. On Wednesday, Google said it was giving a $1,000 credit at B&H Photo to 500 producers, so they could purchase new video production equipment. Recipients include Annoying Orange and MysteryGuitarMan, two participants in Tadcast’s Wonderful Pistachios campaign.

While Parker says he doesn’t think of Tadcast as an agency, playing go-between for brands and kids could be the angel-funded company’s most important role.

“We help steer the process, to make sure the brand is getting what they want, while the producers get to be themselves,” Parker says.

A strong, personal relationship with the video creators also helps Tadcast understand just what this extremely independent bunch will and won’t do for money.

Tadcast has begun to move beyond YouTube branding campaigns into website traffic generation. For shoe manufacturer Lugz, the company created a campaign in which YouTube viewers were encouraged to click on a link below the video to access bonus content on Lutz.com.

Parker says the videos achieved approximately 3 million views, with a 5 percent click-through rate.

Parker says, “Now, we’ll start working with brands that want to drive traffic, not just branding, and pay on an affiliate cost-per-click model for that.”