YouTube Advertising Revenues Estimated to Grow 50% in 2013

[HTchead]

Google has never revealed the scale of profits YouTube makes since acquiring the video streaming service for $1.65 billion seven years ago. However, the analysts and researchers still can take guesses. The latest estimates were made by eMarketer – it predicts that the gross ad revenues of the service will increase over 50% to $5.6 billion this year, which is more than 10% of Google’s total revenue.

Even after the company has paid ad partners and video creators their percentage, its net ad revenues are still predicted to reach almost $2 billion in 2013, up 65% compared to last year’s $1.18 billion. The researchers have also broken out YouTube’s net ad revenues in the United States, estimating that the figure will reach $1.08 billion, $850 million of it coming from video ads. Thus, YouTube gets 1/5 of all US video advertising revenues for 2013.

Of course, all these estimations are all guesswork, but eMarketer claims that it is based on “hundreds of datapoints and studies about YouTube revenues, ad impressions, rates, usage and other information received from research companies, investment banks, Google reports and interviews with industry executives.

Those interested can compare eMarketer’s analysis to other numbers: for example, in May 2013, Morgan Stanley predicted that the company’s gross revenues would reach $4 billion this year, while Barclays thought it would be $3.6 billion. Recent report by analyst firm Wedge Partners also suggested that YouTube accounts for about 10% of Google’s revenues (which corresponds with eMarketer’s analysis), which if the Google’s 4th quarter matched the average revenues across the previous quarters would result in approximately $5.7 billion of YouTube revenues for the year as a whole.

Still, it all remains guesswork, and Google is very unlikely to announce the real figures anytime soon. It is worth noting that the $1.65bn Google paid for YouTube seven years ago (a sum which shocked many people at the time) looks like something of a bargain today.

The company’s public statistics for YouTube reveal that the service attracts 1bn people watching over 6bn hours of video per month, and 80% of its traffic is coming from abroad. 40% of its viewing time is consumed by mobile devices.