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Video Ads Prove Revenue Generators, Brand Builder For Social Media Platforms

Video advertising is booming, and top social networks have positioned themselves to reap the rewards.  

Stateside, the video ad marketplace will grow nearly 30% to $27.82 billion,this year. That means video will make up 25% of domestic digital ad spending for the first time.

That’s according to the latest spending forecast from eMarketer, which expects Facebook-owned properties (including Instagram) to grab nearly a quarter (24.5%) of all domestic video ad spending, this year.

That works out to an astonishing $6.81 billion, which easily makes Facebook the country’s top social video ad platform.

Also, eMarketer expects Facebook’s dominance to continue over the forecast period, with double-digit growth through 2020.

“In-feed video has been a successful ad format for both Facebook and Instagram,” Debra Aho Williamson, principal analyst at eMarketer, notes in the new report. “Marketers rely on in-feed video ads to capture users’ attention and build brand awareness.”

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“A newer video ad format, in-stream advertising in Facebook Watch shows, is still relatively new, but we think advertisers will increase their usage of it because it is similar to linear TV advertising,” Williamson suggests.

While eMarketer does not categorize YouTube as a “social network,” the research firm included the Google property in its report for the sake of comparison.

Stateside, YouTube will generate $3.36 billion in net video ad revenues, this year -- up 17.1% over last year.

In this country, YouTube now derives 73% of its ad revenues from video, while YouTube now represents 11% of Google’s net U.S. ad revenues.

That said, traffic acquisition and content acquisition costs exceed half of YouTube’s gross revenues -- which are higher than its rivals -- eMarketer considers it misleading to directly compare YouTube’s share of video ad revenues to top social networks.

Although not in the same league as Facebook or YouTube, Snapchat’s domestic video revenues will reach $397.3 million this year -- up nearly 19% over 2017 -- eMarketer expects.  

Video is clearly the driving force behind Snapchat’s revenues -- representing 60% of its U.S. ad business through 2020. Yet, Snapchat’s share of social video spending will be 5.1%, this year, while its share of the overall U.S. video pie will be just 1.4%.

For its part, Twitter should derive more than half (55%) of its total U.S. ad revenues from video, this year. Put another way, its video ad revenues will grow just over 12% to $633.3 million. That gives Twitter an 8.1% share of domestic social video ad spending, and a 2.3% share of total video spending.

Through 2020, eMarketer actually expects Twitter’s tiny slice of the video ad pie to actually decrease in size.

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