Thursday, September 11, 2014
YouTube’s US video ad revenues - $1.13 billion in 2014
According to new figures from eMarketer, YouTube’s net video ad revenues—ads exclusively run on the site’s video clips, not including banners, search and other ads on the site, and excluding traffic and content acquisition costs—will grow in step with the video ad market overall, and the site won’t increase its market share significantly in the coming years.
Though its video ads are growing at a rapid rate, YouTube’s potential is currently hindered in part because its video ad placements are not consistent across the board. Advertisers like the volume of users and variety of content on YouTube, and the growth of various channels on YouTube, focused on topics such as beauty tips and gaming, gives advertisers that want to deliver relevant ads to those audiences a very well-targeted reach.
But they’re also increasingly drawn to platforms with exclusively high-quality, well-produced content. Much of the time audiences spend with digital video in general is not useful for advertisers, such as clips that are either too short to include ads or not brand friendly, and both are attributes of many user-generated YouTube videos that get the most views.
eMarketer’s outlook for both AOL and Yahoo is predicated on increases in digital display revenues due to ads placed against premium video content, which includes full-length shows, digital shorts and other professionally produced programming. AOL will see its US display ad revenues grow nearly 20% in 2014, eMarketer estimates, due in no small part to the success of its Adap.tv ad platform. Meanwhile, Yahoo’s US display business is currently in decline—expected to drop 3.6% this year—but aided by its intensified push into premium video content this year, we estimate that Yahoo’s display ad revenue growth will turn positive again in 2015.
Overall, US digital video ad spending continues to increase significantly, up 56.0% this year to reach $5.96 billion, according to eMarketer. Growth will taper off rapidly, however, slowing to 13.9% by 2018, when digital video spending will reach $12.82 billion, according to our forecast. Though video advertisers are following the broader trend of shifting dollars to mobile devices, mobile video ads actually suppress the overall market in part, since many smartphone video ads are short ads accompanying short clips and often cost less than desktop video ads.
Video’s share of digital display ads in the US will gain significant ground, increasing from 21.6% of all digital display advertising last year to 30.1% by 2018. Meanwhile, rich media—which can include video and interactive elements—will also gain share of the digital display market, taking away dollars from banners and other static ad formats.
One key factor holding back the digital video ad market, however, is the fact that more and more digital video content is streamed through subscription services such as Netflix or Amazon Prime Video—neither of which support advertising. In addition, TV will remain by far the leading individual medium for ad spending in the US, totaling $68.54 billion this year—compared with just shy of $6 billion for digital video ads—and TV advertising will increase more than digital video in real dollars in each year throughout our forecast period.-eMarketer
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