When TV Becomes An Accessory To YouTube

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Everyone is talking about video.

Have you noticed how on Facebook, some videos in your newsfeed start on their own now? You don’t have to click on them. They just start. For some, this is very upsetting and disruptive to the Facebook experience. If this is you, step aside. You’re in the minority (and yes, I say this with full acknowledgement that if you’re spending money on mobile data, this newly added features can be both draining and expensive. If this is causing you pain, please do this). Facebook is capturing consumer’s attention, and this is a peek into just how powerful online video’s growth continues to mature… and just how big of a business this is (and will continue to be) for marketers.

It’s bigger (and more important) than you think.

MediaPost ran three separate news items in the past few days that hint at the ever-evolving landscape of online video:

  1. Facebook Rivals YouTube, Tops 1 Billion Videos Per Day. That’s a steep climb, and this sudden growth can be directly attributed to the auto-play function. From the article: "From May to July, Facebook said video views have surged 50%, with more than 65% of the total taking place on mobile. That underscores the broader shift the social network has seen from desktop to mobile use in the last couple of years, with mobile now also accounting for the bulk (62%) of ad revenue. After introducing auto-play video earlier this year, Facebook noted in a blog post today that the feature has led people to discover ‘significantly more content’ as a result. And when advertisers designate video views as the objective of their campaigns, that step translates into up to a 60% decrease in cost-per-view for video ads, the company said."
  2. YouTube Revenue To Hit $1.13 Billion From Video Advertising This Year. To this day, most media pundits still see Google as a one trick pony (search advertising). Seeing over a billion dollars roll in from video advertising in one year on YouTube points to something very interesting: Google dominates search advertising (which it does). Google suddenly starts a strong contender in the video advertising space (which is, exactly, what this is starting to look like). Think about Facebook and Instagram, and what they will have to do to build a similar engine of advertising. From the article: "Google’s YouTube will generate an estimated $1.13 billion in revenue from video advertising this year – up 39% from last year, per research firm eMarketer. Although its market share will not substantially increase, the revenue from ads that run on the site – excluding banners, search and other ads, alongside traffic and content acquisition costs – will grow… The numbers suggest that YouTube fails to monetize the majority of its traffic, per eMarketer." Imagine the model here. Over one billion dollars in revenue – which is nearly forty percent more than last year – and they fail to monetize the vast majority of these video. A lot of that has to do with video length and consumer engagement, but we are starting to see a marketplace for longer videos, as YouTube channels become more popular and as more and more consumers are starting to watch YouTube on their connected TVs, mobile devices, etc…
  3. Mobile Video Audience Nears 115 Million. This is – without question – the most significant component to online video’s growth and continued success. From the article: "The U.S. audience watching video on smartphones in the second quarter grew to 114.4 million – up 18% from 97 million in the year-earlier period, according to the latest Nielsen cross-platform report. The amount of time spent viewing video on phones increased as well to an average of one hour, 41 minutes a month in the quarter, from 1:09 a year ago.

    Still, that figure is dwarfed by the average time Americans spent watching traditional TV, at 142:38 per month, down slightly from 146:37 a year ago. Mobile also lags the desktop Internet as a video platform, where people spent 10:35 watching video, up from 6:28 a year ago. However, the mobile video audience is catching up to the 145.5 million on the Web, which is down from 150 million a year ago."
    Don’t frown. This is massive and it’s also indicative of just how long (and wide) of a runway mobile video still has to go. Think about cheaper mobile data (it’s coming). Think about faster network speeds (it’s coming). Think about more and more connected devices (it’s coming, too). This is a massive audience already at 115 million, but it’s still minor compared to TV. How long do you think that will last?

Can you smell the opportunity?