Premium Video Solidifies Its Lure For Advertisers

The good news for YouTube is that according to eMarketer, its U.S ad revenues will total $1.13 billion this year, and it will account for 18.9% of the video ad market.  

The bad news is that eMarketer says its share of the market will not move for awhile.

Obviously, you could have worse problems than owning nearly 20% of the market. This new study says YouTube advertisers like the much-visited, well-done beauty, health and gaming channels. 

But the other stuff -- presumably including the cute kitten division of YouTube -- is no lure.

“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,” says this report, which is out today.

In short, it would seem eMarketer is saying the “You” in YouTube doesn’t always move much product. Users who generate content aren’t thinking about advertisers, unless they get really popular, in which case they usually catch on pretty quickly.

What’s more, eMarketer notes, the real action in online video viewing is being orchestrated by Netflix and Amazon Prime, and those two content providers don’t carry advertising at all, save Geico pre-roll spots running in Amazon’s viewer participation pilot program.

Netflix is also entering the mini-video market, at least a little, hoping to capture the mobile market, where binge-viewing might last, oh, five whole minutes. While Netflix isn’t looking to become YouTube -- quite the opposite, actually -- it does put pressure on the market.

As YouTube channels make moves to become their own Web entities elsewhere -- Maker Studios being the best example -- you can already sense that as online video grows up and gets better, the better stuff is where the market is moving. 

The glut of online video is working to attract advertisers to the places where quality, premium video is being promoted, and eMarketer charts that trend.

The report predicts that AOL display ad revenues will grow by nearly 20% in this country, and says Yahoo’s display business will dip by 3.6% in 2014. It adds that “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.”  

Altogether, the eMarketer glimpse at the market is very positive for online video, estimating that U.S. digital video ad spending will rise a spectacular 56% this year for a total of $5.6 billion. 

That percentage leap should slow down to “just” 13.9% in 2018 and $12.9 billion, according to its forecast. Slow times!

Online video advertising represents 26.7% of all digital advertising this year. The forecast predicts it will reach 30.1% by 2018.

The real bad news is that as consumers head toward smartphones for their videos, so do advertisers -- and generally ads for the mobile market are shorter and cheaper.

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