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Google and YouTube Dominate Online Video Advertising, Business and Industry Trends Analysis

The fact that Google owns the dominant video site, YouTube, gives it a great knowledge base in how the online audience interacts with video content and related advertising. As of early 2015, YouTube reported more than 1 billion users each month, with more than half of the site’s views done via mobile devices. Analysts at comScore estimate that 196.5 million Americans watched online videos in the month of August 2014 alone, with Google-racking up 159,753 million unique viewers compared to Facebook’s 108,349 million and AOL’s 62,537. Other top video sites include NDN, Yahoo!, VEVO and Amazon Sites.
There is significant potential to add a video element to targeted advertising. For example, when a search for “golf equipment” is performed on Google, a video ad for Nike with a golf pro swinging a club might appear alongside regular search results. A click on the ad could lead to the golf area of Nike’s site. Google’s purchase of DoubleClick, Inc. in 2008 greatly expanded the search engine firm’s abilities in online video advertising sales and tracking. Social media leader Facebook enables advertisers to embed videos, rather than static photos, in their ads with great success.
Major advertisers are diverting significant portions of their budgets away from television to buying online space instead. Starcom MediaVest, a unit of ad agency giant Publicis Groupe, shifted in excess of $500 million from TV advertising to the Internet from mid-2013 to mid-2014. MasterCard, Verizon Wireless and snack-maker Mondelez International are also ramping up online spending and cutting TV budgets. eMarketer forecasts that by 2018, online video, web site ads and mobile ads will make up 36.4% of U.S. advertising spending, while TV ads will account for only 36.1%.

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