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Facebook Controls 87% of U.S. Social Video Ad Spending (Study)

Video advertising to represent 25% of U.S. digital ad spending in 2018: eMarketer forecast

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GIAN EHRENZELLER/EPA/REX/Shutterstock

Even as Facebook’s disclosures of massive user-data breaches this year have damaged its reputation, the social giant’s revenue juggernaut doesn’t show signs of slowing down.

In 2018, Facebook — including Instagram — will rake in $6.81 billion in video-ad spending in the U.S. alone, capturing about one-fourth of digital video-ad spending in the United States this year, according to the latest forecast from research firm eMarketer.

That will keep Facebook firmly in place as the No. 1 social-video ad platform in the U.S., owning almost 87% of U.S. social video ad spending, eMarketer estimated. And the researcher expects the one-two punch of Facebook and Instagram to continue dominating, with double-digit growth in video ad revenue through 2020.

Most of Facebook’s video revenue comes from ads in the Facebook and Instagram feeds, while the newer in-stream advertising formats for Facebook Watch shows is smaller. “In-feed video has been a successful ad format for both Facebook and Instagram,” eMarketer principal analyst Debra Aho Williamson commented. “Marketers rely on in-feed video ads to capture users’ attention and build brand awareness.”

Overall, according to eMarketer’s latest forecast, U.S. video ad spending will grow nearly 30% to $27.82 billion in 2018, meaning video will comprise about 25% of total U.S. digital ad spending this year.

In 2018, YouTube will generate an estimated $3.36 billion in net U.S. video ad revenues, up 17% over last year, according to eMarketer. But because the Google-owned video platform’s traffic acquisition and content costs are more than half of its gross revenues — much higher than other platforms — YouTube’s video-ad revenue isn’t comparable to platforms like Facebook, Instagram, Snapchat or Twitter.

YouTube now generates 73% of its ad revenue from video in the U.S., and the video platform represents 11% of Google’s net U.S. ad revenue, according to eMarketer.

Snap and Twitter are far smaller than Facebook, but both have grown video-ad revenue at double-digit rates, per eMarketer.

Twitter will grow U.S. video advertising just over 12% this year, to $633 million, representing 55% of total domestic ad sales. That gives Twitter an 8.1% share of the U.S. social video ad market but it will see its share drop slightly through 2020, the researcher predicts.

Snapchat’s U.S. video revenue will hit $397 million this year, up almost 19% over 2017, with the category representing 60% of Snap’s U.S. ad business through 2020. For 2018, Snapchat’s share of social video spending will be 5.1% this year, continuing to grow slightly through 2020, according to the eMarketer forecast.