On the same day that YouTube announced which videos on its site created the biggest buzz during 2013, research firm eMarketer released a report predicting the Google-owned company would this year generate gross ad revenue of $5.6 billion worldwide, up from an estimated $3.7 billion in 2012. And for Google, YouTube’s success is significant, as the latter’s ad-related year-on-year income represents an increasing amount of Google’s total ad revenue – 11.1 percent in 2013, up from 8.5 percent last year, and 5.5 percent in 2011.
Although the video-sharing site has to pay out to ad partners and content creators from its revenue, the research firm forecasts YouTube will still be able pull in global net revenue of $1.96 billion, marking a healthy 65.5 percent increase on a year earlier.
“That translates to a 1.7 percent share of all global digital ad revenues – higher than the market shares of Twitter, AOL, Amazon.com, Pandora, LinkedIn, Millennial Media and other large players,” eMarketer says in its report, adding that it expects ad revenue to increase markedly in the coming years as mobile video viewership grows.
Google doesn’t release revenue figures for YouTube, so eMarketer makes its own extensive inquiries to arrive at its estimate, which include analysis of “YouTube revenue studies, ad impressions, rates, usage and other factors collected from research firms, investment banks, company reports and interviews with industry executives.”
What we know for sure is that YouTube has come a long way since it launched with a video about an elephant in 2005. According to its stats page, the site has more than a billion unique users monthly, with over six billion hours of videos watched each month.
Localization in 61 countries and languages has helped spread the service’s reach far and wide since launching in the US, with 80 per cent of traffic now coming from outside its home country.
When Google picked up the video-sharing site in 2006 for $1.65 billion, profits were low and there were an awful lot of cat videos around, but over the years, while those fame-hunting felines remain, YouTube has made huge changes and investments to improve the quality of its content and build its audience, moves that have helped to attract big-money advertisers and make it the success that it is today.