And TV is … advertisers’ biggest outlay. Global TV advertising spend reached $230 billion last year, according to estimates by the media agency Carat. Yet online video advertising spend in 2014 was just $11 billion, according to ZenithOptimedia. It’s growing quickly — expected to experience a compound annual growth rate of 29% between 2014 and 2017 — but even then, at $23 billion, video ad spend will just be a tenth of what TV ad spend is today.
IN other words, there is a huge amount of advertising money at stake. So why is Google so bullish about YouTube?
Omid Kordestani, Google’s chief business officer, kicked things off with this standout stat: “YouTube reaches more 18- to 49-year-olds in the US than any US cable network.”
Not only is YouTube apparently dominating in terms of reach, but people are treating YouTube like their television set.
Kordestani said: “The number of users coming to YouTube, who start at the YouTube homepage similar to the way they might turn on their TV, is up over three times year-over-year. Plus, once users are in YouTube, they are spending more time per session watching videos. On mobile, the average viewing session is now more than 40 minutes, up more than 50% year-over-year.”
Is YouTube better than TV? It is different in one important respect. You can access a YouTube video anytime you want to. You don’t need to wait for the network to air it. I think this, more than anything else, will do TV in.