Online Advertising Could Reach $400 Billion in 5 Years: Google Inc (GOOG)

That other platform
Granted, Facebook Inc (NASDAQ:FB) is still in the early stages of monetizing its platform, but in the coming years, I fully expect marketers to better understand the value the Facebook platform offers. Facebook has already determined that clicks are a worthless measurement for gauging advertising effectiveness on its platform, which why it’s in the process of developing alternative measurements. As long as Facebook can successfully prove that its ads are working and marketers can embrace new metrics, the company has a lot of untapped growth potential ahead of it. Facebook is practically the gold standard when it comes to providing an interactive experience, which could ultimately be leveraged with marketers. In terms of Facebook gunning for YouTube, CEO Mark Zuckerberg said the company wants to be a distribution platform for video content and there’s definitely an opportunity to monetize Facebook-hosted videos, which sounds to me like Facebook will be putting more of an emphasis on video in the future.

It’s a win-win
Technology will continue to play a deeper role in how the world consumes media. As more content continues to be consumed online, advertising dollars are likely to follow suit. According to Arora, the tipping point will be when the majority of televisions become connected to the Internet, inviting the potential for targeted advertising. Arora reckons that if a user just purchased a car, they wouldn’t want to see an advertisement for a new car. Eliminating this waste creates more value for marketers while simultaneously improving the user experience. When the Internet and television finally do converge in the coming years, platforms like Facebook and YouTube are likely to benefit as they continue to drive new levels of interaction and branding.

Ultimately, if Arora is correct, and five years from now online advertising sees a $300 billion increase in spending from today, investors in the right positions stand to make some exceptional returns.

The article Online Advertising Could Reach $400 Billion in 5 Years originally appeared on Fool.com and is written by Steve Heller.

Fool contributor Steve Heller owns shares of Google. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google.

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