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Advertisers to Spend $5.60 Billion on YouTube in 2013 Worldwide

YouTube takes home $1.96 billion in net global digital ad revenues and a 20.5% share of US video ad market

YouTube will bring in about $5.60 billion in gross ad revenues this year, according to eMarketer’s first-ever analysis of how much advertisers spend on the platform.

eMarketer analyzed hundreds of data points and studies about YouTube revenues, ad impressions, rates, usage and other factors collected from research firms, investment banks, company reports and interviews with industry executives to develop its figures.

YouTube doesn’t get to keep all its gross revenues, of course. But after paying back advertising partners and video content creators, eMarketer still expects the company to net $1.96 billion in ad revenues worldwide this year, up 65.5% over 2012. That translates to a 1.7% share of all global digital ad revenues—higher than the market shares of Twitter, AOL, Amazon.com, Pandora, LinkedIn, Millennial Media and other large players.

In the US, YouTube will net $1.08 billion this year in ad revenues, equivalent to 6.3% of all of Google’s net US ad revenues for the year, and a year-over-year increase of 51.7%.

Unsurprisingly, the bulk of YouTube’s ad revenues come from video formats. This year, $850 million in YouTube’s US ad revenues will come from video ads—helping the company to a dramatic 20.5% share of the overall $4.15 billion US video ad market.

Video ad revenues are expected to increase significantly in coming years for YouTube’s US operations, particularly as mobile video viewership grows. eMarketer estimates the company’s revenues from video ad formats will hit $1.22 billion next year, claiming a 21.1% share of all US video ad revenues.

eMarketer believes much of YouTube’s growth has come from growing consumer demand to view video content across devices, combined with Google’s continuing efforts to accommodate advertisers’ desire to reach the multiscreen audience through features such as Paid Channels and TrueView.

eMarketer bases all of its forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population along with company-, product-, country- and demographic-specific trends as well as trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

In addition, every element of each eMarketer forecast fits within the larger matrix of all our forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of each forecast means those assumptions and framework are constantly updated to reflect new market developments and other trends.

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In this case, eMarketer developed multiple forecasting models based on hundreds of data sets and studies conducted on YouTube ad revenues, ad impressions, rates, usage, partner fees and other figures—all of which was collected from research firms, investment banks, company reports, industry interviews and other research sources before being incorporated into our models.

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