In recent years, marketers have spent increasing sums on online video. So for Google and Facebook, prior purchases of YouTube and Instagram (the latter of which has pivoted increasingly to videos and Stories) appear to be increasingly wise decisions. In Q4 of 2019, figures from the latest report [download page] by Merkle reveal that YouTube accounted for 26% as much ad spend as Google Ads, while Instagram accounted for 27% of total Facebook ad spend.
Google revealed ad revenue from YouTube for the first time this year in its investor communications, showing that the platform took in more than $15 billion of ad spend in 2019. While this is a smaller fraction of its reported $98 billion in Google Search revenue than Merkle has found in its analysis, it’s worth bearing in mind that its investor results represent global revenues from companies of all sizes, whereas Merkle’s data is based on North American figures from its clients.
Off the back of its success in Instagram Stories, Facebook also revealed in its 2019 end of year investor presentation that there was a continued focus on video (in the form of the Watch tab on Facebook and the Explore function on Instagram) as well as pushing commerce-based functionality. (Facebook’s Watch strategy seems to have since evolved as it pulls back from original content and sports streaming.)
Turning back to Merkle’s figures, the growing focus on video appears to be encouraging advertisers to spend more on these platforms. Among Merkle’s clients, YouTube ad spend grew by an impressive 43% year-over-year, with Instagram boasting a 38% uplift.
For the original Facebook platform, spend was also up by 15% – representing accelerated growth for the three consecutive quarters. And while Facebook ad impressions are slightly down (-5%) over last year – a not surprising fact, given that its popularity has seen a drop among American youth – the rate that advertisers pay is up, with CPMs seeing a growth of 20% year-over-year. For Instagram, CPMs have not risen as strongly (7%) but the number of impressions has risen faster than YouTube, at 29%.
YouTube’s CPMs have seen the strongest growth – at 35% – with impressions rising more modestly, by 6%.
The full report from Merkle can be downloaded here.
About the Data: Figures are based on spend among Merkle clients in North America. Samples are restricted to those with active programs for at least 19 months and have not significantly changed their strategic objectives or product offerings.