Alphabet Inc. (GOOGL) leverages YouTube’s strength for rich ad agreements

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Alphabet Inc. (NASDAQ: GOOGL) is a market leader in digital advertising, but it has far less clout in video advertising due to fierce competition. The digital behemoth hopes to win in this market as well, leveraging the might of its YouTube service.

Alphabet, or rather Google’s business, has long attempted to profit from video advertising. The yearly volume of this business is expected to be over $65 billion. Previously, Google and Disney had short-term advertising contracts, but the latter eventually picked a new partner to run the adverts.

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However, Google may exploit YouTube TV’s potential to negotiate a few long-term arrangements.

YouTube TV now has more than 5 million subscribers. This places it among the top virtual providers of multi-channel television programming. The parent business may use the video service’s potential to access the lucrative industries of premium advertising and linked TV.

Google’s advertising technology can put adverts into TV feeds on the fly. Other publishers collaborating with Google utilize this technology to populate the ad inventory of their linear networks, streaming services, and digital inventory.

Current market trends in video content imply consolidation, and merged enterprises may be able to negotiate more aggressively to obtain a better price. Large distributors, on the other hand, can withstand this strain. With an increasing number of viewers, YouTube TV has the potential to generate tremendous value in the advertising market.

On the one hand, as a channel with a big number of followers, YouTube might get rich contracts. Google, on the other hand, may utilize YouTube to increase its engagement with ad suppliers.

GOOGL stock fell -0.10 percent in the last week and increased 1.98 percent in the previous month. During the previous quarter, this company’s shares fell -0.07 percent. The stock has been down -11.62 percent in the previous six months, with a full-year loss of -16.07 percent. This stock’s year-to-date (YTD) price performance is at -21.15 percent at the time of writing.

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