YouTube has tripled advertising sales on mobile devices in the past six months, according to Bloomberg. The company has said that the additional revenue has contributed an estimated $350 million to the video-sharing website.
When you crunch the numbers, it seems that out of the one billion YouTube users, about a quarter now use YouTube through handheld devices. This has, in turn, increased the amount of money being spent on promotions to get the attention of that audience, according to Lucas Watson, the Vice President of Sales at YouTube.
The increase in YouTube’s mobile video-advertisement sales has shown for the first time that the company is making progress in getting marketing dollars in a market that has strong presence of other video-streaming websites like Hulu.
YouTube tripled its mobile advetisment sales in the last six months
Overall, faster wireless networks and the increased use of smartphones and tablets have shown that there are more people and hence, more potential users for video-ads. According to eMarketer, the US mobile video-ad sales are estimated to grow more than 10-fold from last year, and will rise to around $2.69 billion by the year 2017.
Watson said in the interview: “The commercial business has exploded. It’s a huge part of our business, and we know that’s where it’s headed.” This seems plausible because estimates by Martin Pyykkonen, an analyst with Wedge Partners, show that YouTube allegedly generates about 10 percent of Google’s total revenue.
The things that need to be considered here is Google’s $14 billion sales revenue noted in the last quarter as well as Pyykkonen’s projection that mobile contributes to about around 25 percent of revenue. Thus, it seems like as much as $350 million may be coming from mobile video-ad sales.
According to Nielsen Holdings, more than half of the smartphone users in the US used their YouTube app in March. This comes to about 70 million people, which is higher than the 42 percent of smartphone users who were seen using the same app last year.
The challenge for mobile-ads is holding on to consumers, though. YouTube, which can be downloaded from any App Store and is playable on any Adroid OS based device, integrates commercials by showing them before a video starts playing.
Watson said that YouTube wants to make it easy for companies to shift the advertising to mobile video by automating the task for marketers buying advertising. YouTube will also split the airtime for advertisements between computer browsers and mobile devices. He went on to say that companies can also decide to not partake of multiscreen advertising.
The recent growth in usage, according to Phil Farhi, Director of Product Management at YouTube, came after Apple decided to drop YouTube as a core application in the iOS software available for iPhones and iPads.
Companies like video-game maker EA are also looking at increasing their mobile advertising, according to Christine De Martini, the Social Marketing and Media Manager at the company. Supporting this, De Martini said, “YouTube as a video platform is a definitely a key one for our products. I would anticipate as mobile consumption continues to grow, we’ll have to find ways to make sure that we reach our audiences on whatever platforms they’re on.”