YouTube is expected to generate around USD 5.6 Bn in ad revenue this year, marking a sharp increase of more than 50% over last year’s ad revenues of USD 3.7 Bn, according to market researcher eMarketer.
YouTube, acquired by Google in 2006 for USD 1.65bn, has more than 1 Bn viewers every month and generates most of the advertising revenue with video ads. Infact, it has a share of about 20% in the overall spending on advertising in the US video ad market.
However, the company doesn’t get to keep all its gross revenue generated, but even after paying back advertising partners and video content creators, it is still estimated to make USD 1.96 Bn in net advertising revenue. This means it gets a 1.7% share of all global digital ad revenues—higher than the market shares of other large players like Twitter, AOL, Amazon.com or LinkedIn among others.
The revenue is higher than earlier estimated, and this can be attributed to the increased consumption of video content across several devices, with mobile playing a major role in that. Further the shift in viewer habits and the growing trend amongst the younger generation to watch videos online instead of on television are also key factors that will probably drive advertisers to invest more in ads on online streaming platforms.
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