Google chief financial officer Ruth Porat said 'significant growth in YouTube revenues' was a highlight in the quarter
Google chief financial officer Ruth Porat said 'significant growth in YouTube revenues' was a highlight in the quarter

The number of advertisers on YouTube has soared more than 40 per cent in the past year as big brands seek to reach millennial consumers on Google’s video site.

On the eve of VidCon, an online video event in Los Angeles, YouTube said advertisers from the top 100 brands, based on a ranking by consultants Interbrand, were spending 60 per cent more than last year.

The Google-owned website does not disclose revenue figures but the data provide an indication of how it is benefiting from an explosion in demand for digital video advertising as millennials — advertisers’ term for those aged 18 to 34 — spend more time on the site.

Google spent more time than usual detailing YouTube’s contribution to the company on its earnings call last week. Ruth Porat, the company’s chief financial officer, said “significant growth in YouTube revenues” was a highlight in the quarter.

Tara Walpert Levy, managing director of agency solutions at Google, said the 10-year-old company had been in “hurry up and wait mode” until it finally saw a “sudden boom in one year”.

She described how advertisers began to see that young YouTube creators were becoming mainstream celebrities with their own television shows and publishing deals.

“There was a Variety article seven or eight months ago which listed the top celebrities among younger folks, and the majority of them were YouTube celebrities,” she said.

“It was a pivotal moment in the industry where marketers could not name half of those people and they were like ‘Wow, we’re out of touch with the very people we’re trying to reach’.”

Many brands partner with YouTube celebrities who create their own videos around the brands and post them to millions of followers. The number of monthly views of videos by the top 100 brands has increased 55 per cent from the previous year to 40bn views.

Millennials have flocked to YouTube but the audience is expanding from there, with the video site reaching more people aged 18 to 49 than any cable network in the US, according to market researcher Nielsen.

Growth in the amount of time spent watching videos on YouTube accelerated and is up 60 per cent year on year, Google said in its earnings call. On mobile, the average viewing session is now more than 40 minutes.

Ms Walpert Levy also said YouTube had made changes to make the platform more attractive to advertisers, including creating a measurement system with Nielsen and ComScore, to help marketers compare its effectiveness with television advertising.

It also created Google Preferred, a service that allows marketers to put their adverts only next to the top 5 per cent of YouTube channels. Such targeting means ads can be paired with a popular star or viral kitten video, rather than obscure content.

The digital video market grew 52 per cent last year to hit $5.8bn, according to data from researcher E-Marketer. It is forecast to grow 34 per cent this year to hit $7.8bn. YouTube has about 19.3 per cent of this market, and is predicted to edge up to 20 per cent this year.

But YouTube faces competition, with the biggest social network Facebook vying for more video advertising sales, and other social apps such as Twitter and Snapchat putting more focus on their video products.

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