With YouTube, Alphabet Taps Into the New Video Advertising Market

Online streaming services such as Amazon Prime Video and Netflix and are quickly taking over where network and cable television have long held sway.

Within the next four years, experts estimate, online viewing will surpass TV watching.

In fact, some analysts predict that TV sets will become obsolete as soon as the next decade.

It makes sense, then, that advertising dollars should follow this trend.

Next year, digital-ad spending will surpass that for traditional TV ads by more than $5 billion, according to eMarketer.

This is where the big profits will be made, and the hottest digital ads are video. This year, digital-video ad spending is expected to grow by about 28.5%, to $9.84 billion

Social-media companies such as Facebook are latching onto this moneymaking opportunity.

Facebook recently unveiled a video ad marketing brokerage service within its Audience Network platform. The company’s first client was fast-food restaurant chain Jack in the Box.

But there is a huge market in this area that has remained untapped.

With the future of advertising in video, even smaller businesses want to take advantage of the trend. However, getting started without the support of a huge corporate infrastructure is more than daunting.

That is where Alphabet  (GOOGL) subsidiary YouTube comes in. The video-sharing platform, which was started by former PayPal employees in 2005, was purchased by then-Google for $1.65 billion a year later.

Facebook, Alphabet and PayPal are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stocks here. Want to be alerted before Cramer buys or sells FB, GOOGL or PYPL? Learn more now.

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