Video Drives $28 Billion in Ad Spending on Social Media
October 9, 2018 by Paul AusickLove ’em or hate ’em, video ads on popular social media sites are forecast to increase site revenues by 30% this year to a total of $27.82 billion. That represents a record-high 25% of all U.S. digital advertising dollars in 2018.
The data were reported Tuesday by research firm eMarketer. The big winner, with nearly a quarter of all video ad spending, is Facebook Inc. (NASDAQ: FB). Facebook (including Instagram) is projected to rake in $6.81 billion this year, easily the largest share of spending (nearly 87%) on video among the top U.S. social media sites.
eMarketer’s principal analyst, Debra Aho Williamson, said:
In-feed video has been a successful ad format for both Facebook and Instagram. Marketers rely on in-feed video ads to capture users’ attention and build brand awareness. A newer video ad format, in-stream advertising in Facebook Watch shows, is still relatively new, but we think advertisers will increase their usage of it because it is similar to linear TV advertising.
Twitter Inc. (NYSE: TWTR) is projected to receive half its total ad revenue from video, a year-over-year increase of 12% to $633.3 million. Twitter’s share of total U.S. social media ad dollars amounts to 8.1%, and a 2.3% share of all video ad spending. eMarketer expects Twitter’s share of video spending to continue dropping slightly through 2020.
Snap Inc. (NYSE: SNAP) is expected to see an increase 19% year over year in video revenues for a 5.1% share of social media ad spending. Snapchat’s total video revenues are forecast to reach $397.3 million this year and to account for 60% of the social media site’s advertising business.
Alphabet Inc.’s (NASDAQ: GOOGL) YouTube is not in eMarketer’s social media sector, but the researchers noted that it is too big to ignore. In 2018, YouTube is expected to garner $3.36 billion in U.S. video ad revenue, up 17.1% year over year. Nearly three-quarters (73.1%) of YouTube’s U.S. ad revenues are generated by video ads. Overall, YouTube contributes 11% of Google’s net U.S. ad revenues. YouTube’s high traffic and content acquisition costs make comparisons less accurate with the other social media sites.
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