Why Video Is a Big Deal for Twitter

Video has become a big focus for Twitter (TWTR) and for good reason. The first is the shift from television commercials to Internet advertising. In the United States, video hit a milestone by reaching 25% of total digital ad spending in 2018, according to data from eMarketer. Video is also Twitter’s growth engine, as the company is disclosing early this month that video was its fastest-growing ad format in the fourth quarter, which ended in December. Video has risen to account for more than half of the advertising revenue for Twitter. The company generated $791 million in advertising revenue in the fourth quarter, which ended in December.

Although Twitter currently trails Facebook (FB) and Google (GOOGL) in terms of digital video advertising market share in the United States, the company is determined to grow its share of the market not just in the United States but overseas as well. Twitter inked 100 live video agreements in 2018 including 50 deals with international partners.

But there is no shortage of competition in the digital video advertising space. In addition to digital video advertising titans Facebook and Google, traditional television companies such as AT&T (T) and Comcast (CMCSA) have also set their sights on the digital video advertising space with new online video services lined up for later this year or next year. Amazon (AMZN), an increasingly disruptive force in digital advertising, early this year launched an ad-supported online video service through its IMDb unit.