Google’s YouTube Is Crushing the Competition
Google Inc. (NASDAQ:GOOG) is claiming that YouTube has tripled advertising sales on mobile devices in the past six months, citing the fact that about a quarter of YouTube’s 1 billion users access the site from handheld devices.
The company claims that YouTube has contributed $350 million in revenue towards mobile ad sales. The popular video-sharing website brings in 10 percent of Google’s total revenue, according to estimates from analysts. YouTube has helped spur an increase in promotional spending to reach its many users that access the site via smartphones and tablets. The data shows that YouTube has done extremely well attracting marketing dollars, even facing competition from rivals like Hulu LLC, which is owned by News Corp. (NASDAQ:NWSA), Comcast (NASDAQ:CMCSA), and Walt Disney Co. (NYSE:DIS).
Mobile video-ad sales in the U.S. are expected to increase exponentially in the coming years, as wireless networks get faster and smartphone and tablet sales continue to grow. According to research from EMarketer Inc., mobile video-ad sales in the U.S. will reach $2.69 billion by 2017. It’s estimated that half of smartphone users in the U.S. used the YouTube app in March.
The YouTube smartphone app is available on Apple’s (NASDAQ:AAPL) iOS and Google’s Android smartphones. Advertisements play before the user’s chosen video. Julie Ask, an analyst at Forrester Research Inc., commented on the difficulties advertisers face in developing mobile video ads that will keep users engaged. “People have less patience on the phone; consumers have become more task-oriented,” Ask said. “The ads have to be entertaining and there’s a higher bar to some extent.”
YouTube has also put forth the effort to help make online video advertising easy. The website automates the task for marketers, splits an ad’s airtime between computer browsers and mobile devices, and allows the option to opt out of multi-screen advertising.
The reported growth in revenue comes after Apple decided to drop the YouTube app as a core application in iOS devices last year, showing that the site apparently doesn’t need Apple’s help.