THE REVOLUTIONThe was originally published to news.cmlviz.com.
There is a juggernaut advertisement buying firm called Magna Global that is responsible for around $37 billion in marketing investments on behalf of clients like Johnson & Johnson and Coca-Cola. The company just announced that it has moved $200 million in ad spends away from TV ads and to Google's YouTube for online video ads.
But this isn't about a $200 million deal, this is about a $200 billion transformation. First, a step back:
THE SET UP
Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL) and Twitter (NASDAQ:TWTR) all noted that online video was becoming the preferred outlet for advertisers across their various properties.
While Facebook (NASDAQ:FB) claims it receives 10 billion video views a day, Google announced this on its latest earnings call:
"YouTube on mobile alone now reaches more 18 to 34 and 18 to 49 year olds in the U.S. than any TV network, broadcast or cable."
Though much smaller, Twitter reported that 82 percent of its users watch video content on the platform and 90 percent of those came from mobile. Further, since August 12th, 2015, Twitter's live online video app Periscope has nearly tripled.
But that's not the news.
The battle for online video and streaming video on demand (SVOD) has rapidly turned into a free for all, and there's good reason. First, here are the most visited online video sites from our friends at Statista:
Google sits at the top, with Facebook right behind it. But this is just one piece of the puzzle. Here is the revenue forecast for online video, and friends, it’s about to get a lot larger:
Just remember that forecast for 2016 -- $9.14 billion -- for a second.
Now, there are 133 million households in the United States alone with a cable TV subscription and 75% of those people watch TV everyday (Source: AYTM). Check out how much is spent on standard Television advertisements:
In stark contrast to online video advertising, which is pegged at market size of less than $10 billion, TV advertising is pegged at around $200 billion -- or 20-fold larger.
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We can throw that 106% growth and $9.14 billion estimate for online video advertising in 2016 out the window. Given the circumstantial evidence we received from each of the company's individual earnings reports and then the empirical evidence we just got from Magna Global's shift from TV ads to online video ads, it's now plainly clear:
Online video advertising is going to be one of the largest advertising media in the world and there are just a few tech companies that will take all of it.
Facebook's earnings were unbelievably good and, while the market did a stutter step after Google's earnings, the company's results were also staggering. Unbelievably, the news just got better. This is the beginning of a total disruption with a handful of tech companies ready to grab hundreds of billions of dollars.
There is a sleeping giant that seems to have already caught on. We learned from Bloomberg that Amazon (NASDAQ:AMZN) is now getting into web advertising, using its Prime Now service as the platform.
Google, Facebook and Twitter can make any argument they like about the relevancy of their ad platforms, but a video advertisement that sits next to the "buy button" is incomparable.
WHY THIS MATTERS
This is what institutional research reads like -- it spans all thematic trends -- it goes further than the headlines into the trends that will shape the next decade. Google and Amazon are just two of CML Pro's precious few 'Top Picks.' But, to find the 'next Google' or 'next Amazon,' we have to get ahead of the curve. This is what CML Pro does. Our research sits side-by-side with Goldman Sachs, Morgan Stanley and the rest on professional terminals, but we are the anti-institution and break the information advantage the top .1% have.
Each company in our 'Top Picks' is the single winner in an exploding thematic shift like artificial intelligence, Internet of Things, drones, biotech and more. In fact, here are just two of the trends that will radically affect the future that we are ahead of:
The Internet of Things (IoT) market will be measured in trillions of dollars as of next year. CML Pro has named the top two companies that will benefit. Here's cyber security:
There's just no stopping the growth in the need for cyber security and we are right at the beginning. CML Pro has named the single best cyber security stock to benefit from this theme.
These are just two of the themes we have identified and this is just one of the fantastic reports CML Pro members get along with all the visual tools, the precious few thematic top picks for 2016, research dossiers and alerts. For a limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.
Thanks for reading, friends.
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