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How Google is Driving Mobile Video Market Growth

Google’s top advertising customers are pushing for convergence of mobile and video quickly, which is turning into a strong catalyst of growth of the global mobile video market.  With their largest advertising customers wanting greater flexibility in bringing video to mobile devices, Google will make significant strides this year to make that happen.

During their latest earnings call, Google execs said that Android, Chrome and YouTube are the highest priority areas of their business. I’ve been following the last year of earnings calls closely, and it’s clear that Google’s largest advertising customers are pushing the company to bring video to mobile at a level of performance and usability not accomplished yet.  The Q2, 2012 earnings call transcript makes this point clear which can be accessed here Google’s Management Discusses Q2 2012 Results – Earnings Call Transcript.

 Mobile and Video: Transforming Convergence Into Cash

Over the last year, Google executives have mentioned the growth of YouTube and its quick evolution from a content management system to a profitable advertising platform.   During the Q1, 2012 earnings call held on April 12, 2012 the following points were made:

During the Q2, 2012 earnings call, Nikesh Arora, Senior Vice President and Chief Business Officer started his comments regarding the YouTube business with the statement “I think in 2007 it was when newspapers frequently said YouTube is groping for an effective business model. I think we can declare we found our model.” Immediately after making this statement, Mr. Arora mentioned that yearly account signups have doubled year-over-year and users are uploading over 72 hours of video every minute.  He also mentioned that  “thousands of partners are making six figures and we’re proud to work with major record labels in Hollywood studios on this platform.”

The call continued with the points made of Danish advertisers shifting their television advertising dollars to YouTube and other Google branding solutions.  Additional companies mentioned on the call using YouTube-based advertising include Denon, Shire, and Intel.  Clearly these companies have major product introductions coming up and see mobile video as perfect for reaching more potential customers than ever before.

Google’s Challenge: Keep Content Quality and User Experience Constantly Improving

If Google is going to attain the full revenue potential of YouTube as an advertising platform, they’ll need to focus on the following factors:

Mobile Video: The Market YouTube Built

The size of the worldwide mobile video market was comprised of 429 million mobile video users in 2011, projected to grow exponentially to 2.4 billion users by 2016.  Smartphones and tablet sales will contribute 440 million new mobile video users during the forecast period.  These market estimates are from the recently published Gartner report, Market Trends: Worldwide, the State of Mobile Video, 2012.

Additional take-aways from this report include the following:

Source: Market Trends: Worldwide, the State of Mobile Video, 2012. Gartner Group. Published: 10 February 2012 ID:G00223693 Author: Shalini Verma.   Link: http://www.gartner.com/id=1920315

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