Google Reorgs To Grab Brand Spend, YouTube The Anchor

youtube-logo-200Google bought YouTube in 2006 for $1.65 billion. There were two (or three) primary reasons: YouTube had “won” as the top online video destination, it was considered a “social media” property and Google saw it as the gateway to brand advertising dollars.

For three or four years thereafter, financial analysts and institutional investors complained loudly that YouTube was too costly and wasn’t making money — “when was it going to make a profit?” was the tired refrain. There were also numerous concerns about copyright liability (exemplified by Viacom’s $1 billion lawsuit against the company) .

However, Google beat Viacom under the safe harbor rules of the Digital Millennium Copyright Act. And, it has continued to be the dominant video destination since the acquisition. It has the largest audience, most content and highest engagement of any online video network or site.

comscore video rankings 11/13

According to an analysis performed by eMarketer, YouTube will make $5.6 billion in gross ad revenue in 2013. Of that figure, YouTube will see $1.96 billion in net ad revenue this year. Net ad revenues for YouTube in the US will be just over $1 billion, which represents about 6.3 percent of Google’s 2013 US net ad revenue according to eMarketer.

YouTube revenue forecast

According to USAToday Google recently reorganized its ad business into two primary units: “a performance advertising group and a brand advertising group.” Formerly product-specific groups (i.e., search, display, social, mobile) are now subsumed under these broader categories. YouTube and video are at the center of Google’s renewed push into brand budgets.

It’s smart for Google to think about advertiser objectives rather than ad platforms. It will help internal coordination across platforms and also offer more of what agencies and advertisers want — simplification.

Google’s rivals, Facebook, Yahoo and Twitter, are also using video as a way to grab more brand dollars. According to an estimate from eMarketer digital brand advertising will be worth $18 billion this year, growing to $31 billion by 2017. Overall brand advertising (including TV and other traditional media) may be worth between $200 and $300 billion in the US on an annual basis.

Related Topics: Channel: Video | Google | Google: Business Issues | Google: Display Advertising | Google: TV | Google: YouTube | Top News


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

Connect with the author via: Email | Twitter | Google+ | LinkedIn

Marketing Day:

Get the top marketing stories daily!  


Other ways to share:

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. You can read more about our comments policy here.

Comments are closed.

Get Our News, Everywhere!

Daily Email:

Follow Marketing Land on Twitter @marketingland Like Marketing Land on Facebook Follow Marketing Land on Google+ Subscribe to Our Feed! Join our LinkedIn Group Check out our Tumblr! See us on Pinterest


Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States


Australia & China

Learn more about: SMX | MarTech

Free Daily Marketing News!

Marketing Day is a once-per-day newsletter update - sign up below and get the news delivered to you!