YouTube pioneered digital video ad revenue online, and in the most recent figures will bring in some $1.13 billion in digital video ad revenue for 2014, according to eMarketer. That pencils out to 18.9 percent of the total revenue for US digital video ads, which is not too shabby at all. The outlook that eMarketer sees is for YouTubes net video ad revenues to “grow in step with the video ad market overall, and the site won’t increase its market share significantly in the coming years.”
That’s not exactly what YouTube would like to see, but the market for digital video is increasingly competitive. Advertisers certainly like channels on YouTube that deliver nicely segmented audiences, such as beauty tips or gaming, but the reality is that such focused content is also becoming available elsewhere on the Internet. Those places can have more appeal for advertisers than YouTube, because much of YouTube’s content is either too short for advertisers (users won’t stick around long enough to view the ads) or the video is not brand friendly.
Thus, eMarketer’s projections show that AOL and Yahoo will be gaining in digital display revenues by placing ads next to premium video content, the kind of content where viewers will spend much more time. That includes full-length shows, digital shorts and other professionally produced programming.
According to eMarketer, AOL will see US ad display ad revenues grow nearly 20 percent this year, due to the success of AOL’s Adap.tv ad program. Yahoo is seeing its US display ad business drop this year by 3.6 percent, but with a strong push into premium video content this year, that segment is epxected to grow in 2015.
US digital video spending is booming, with 56 percent growth expected this year as the market reaches $5.96 billion. Growth is expected to slow in the next few years, though, dropping to only 13.9 percent in 2018 as the market hits $12.82 billion. Video’s share of digital display ads will continue to grow for the next few years, eMarketer projects, from 21.6 percent of all display ads last year to 30.1 percent in 2018.