Will Facebook and Twitter Challenge YouTube in the Video Ad Space?



Video ad market is growing fast

In the previous part of this series, we discussed how Google’s (GOOG) YouTube is benefiting from the advertising market shift from TV to mobile video. It’s no wonder Interpublic Group (IPG), a media agency, announced plans to divert $250 million in ad spending from TV networks to YouTube, according to Google.

The video ad market has indeed seen great growth potential. According to a report from eMarketer and as the chart below shows, US (SPY) digital video ad spending could grow from $5.2 billion in 2014 to $14.8 billion in 2019, a healthy compounded annual growth rate of 23%.

However, rivals Facebook (FB) and Twitter (TWTR) have started to become more aggressive to leverage this fast-growing market. In a short period, Facebook has managed 100 million hours of video watched with 8 billion video views each day on its platform.

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Facebook and Twitter are striving hard to penetrate the video ad market

Earlier, Facebook started to focus on autoplay video ads in users’ News Feeds. Then it experimented with other video formats, such as Suggested Videos. Suggested Videos produce content from professional media companies, similar to what YouTube offers. Facebook also added a live video feature to its Mentions app. More recently, it extended the capabilities of its Audience Network to support more promotional videos across third-party websites and applications.

Twitter, on the other hand, is striving hard to grow its user base as well as revenue growth. Its stock has taken a beating mainly because of its inability to grow its user base, a crucial metric for a social media company. However, the company recently struck a deal with the NFL to stream Thursday night games. It hopes this deal will not only help it gain viewers but also help it grow its video ad revenues.


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