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Google’s TrueView Ad Format Is Popular with Advertisers

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TrueView ads are popular with advertisers

In the last part of this series, we discussed how Google’s (GOOG) (GOOGL) YouTube made rapid progress in its monetization efforts. Google also credited YouTube’s revenue growth to the TrueView ads’ format.

TrueView ads are the in-stream ads where an advertisers’ video ads play automatically before the start of a YouTube video. In these ads, the viewers can skip an ad after viewing it for five seconds. If a viewer skips an ad before viewing it for 30 seconds or before the end of the ad, the advertisers don’t have to pay anything.

The TrueView ad format is very popular with advertisers. According to Google, the number of TrueView impressions on YouTube grew by 75% on a YoY (year-over-year) basis.

During the earnings call, Google gave Walmart (WMT) as an example. Walmart benefited extensively from TrueView ads during last year’s holiday season. Walmart mentioned that during Black Friday week, TrueView ads helped it gain a 300% week-over-week increase in its channel views.

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YouTube is the most viewed streaming site

TrueView ads certainly helped Google maintain its leadership position among the streaming sites used to watch videos. According to a report from eMarketer, citing a June 2014 survey by Frank N. Magid Associates, 75% of US digital video viewers used YouTube to watch videos. Only 33% of the viewers used Facebook (FB), 28% used Netflix (NFLX), and 17% used Yahoo (YHOO)—as the above chart shows.

To gain diversified exposure to Google, you could invest in the Technology SPDR (XLK). XLK invests 3.8% of its holdings in Google.

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