Google Inc (GOOG): America’s Best Growth Stock: YouTube?

While the implications are huge for YouTube, it’s also great news for social platforms like Facebook Inc(NASDAQ:FB) ; 18% of Gen C watches videos because someone shared a video with them on a social network. Twitter is already trying to take advantage of this trend by introducing earlier this year a new tool, called Vine, for posting six-second videos.

The explosive growth of video advertising
Gen C’s collective embrace of online video is translating into real ad dollars. According to a Pew Research Center report, digital video advertising spending in the U.S. grew from $2 billion in 2011, to $2.93 billion in 2012, climbing faster than all digital advertising segments.

The largest benefactors are the social platforms like YouTube and Facebook, which facilitate video access and dissemination. Every time a user engages in an action such as “liking” a post or sharing a video, these tech giants gain additional data they can use to give advertisers useful information for their campaigns. Even more, this data is becoming available in an increasingly more real-time fashion.

Traditional media outlets, like the New York Times Company(NYSE:NYT) , will struggle to compete, as social tech companies offer increasingly targeted advertising options. Chief Information Officer Marc Frons vented on the issue to State of the News Media 2013, an annual report on American Journalism: “The networks [e.g. Google Inc(NASDAQ:GOOG) and Facebook] have led a shift in ad dollars away from classic display ads toward targeted, real-time purchases that are driving down rates and disintermediating news publishers.” Frons of the New York Times adds, “Traditional ads are not going away, but they aren’t growing as they once were.”

YouTube: the ultimate benefactor
eMarketer estimates that digital video advertising will reach 15% of the digital U.S. ad market by 2016, up from just 8% today — and there is no brand better positioned to ride this wave than Google Inc(NASDAQ:GOOG)’s YouTube.

The article America’s Best Growth Stock: YouTube? originally appeared on Fool.com and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google Inc(NASDAQ:GOOG). The Motley Fool owns shares of Facebook and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.