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Google Allows Ad Tracking on YouTube

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As per The Wall Street Journal, Google has recently decided to allow Nielson Holdings (NLSN - Free Report) to place measurement tags on advertisements running on its YouTube service.

Nielson enables marketers to track the performance of online ads in terms of the number of people viewing the ad and the frequency at which they are viewed. With the easy availability of Internet on tablets and smartphones, there has been a significant increase in the number of people viewing video ads compared to television ads.

This has also led advertisers to shift their marketing focus to the online channel. Nielson provides relevant data to advertisers such as demographic data about who sees the ads, information that it gets partly through a partnership with Facebook Inc (FB - Free Report) .

Google will now allow Nielsen and comScore to measure its ads, but Nielsen is more significant because it already has a measurement system for TV. Advertisers have been testing the online video market due to growing Internet usage in the recent past. But they need an independent platform to determine the effectiveness (ROI) of ads on the two platforms. Since Nielsen already tests for TV and many advertisers use this service, its simultaneous measurement on YouTube will allow comparisons.

Prior to this announcement, no outsider was allowed to place tags on Google’s YouTube service. On the contrary, Google relied on its own measurement of ads running on the video-sharing website. Though Google did not disclose why it took so long to allow tracking, industry-insiders believe that the decision had something to do with Nielson’s close association with Facebook, which happens to be a fierce competitor of Google.

In the meantime, Google continues to innovate. With the recently launched update to Google’s search application for devices running Apple’s (AAPL - Free Report) mobile operating system, people will be able to avail a unique facility by which they can set reminders on an android device at home and later receive them on an iPhone.

Google is a market leader in online advertising and it has been trying to explore various ways to diversify its revenues and fight competition. Google continues to acquire smaller companies with specialized technology to boost its different offerings. In Feb 2013, it acquired Channel Intelligence for $125 million to boost its e-commerce business.

Earlier this year, it acquired an infrastructure startup company, Talaria Technologies, to boost its cloud offerings. Google also acquired a mobile mapping and navigation company – Waze Inc. – for about $1.1 billion.

Google reported gross revenue of $14.89 billion in the third quarter of 2013, up 5.6% on a year-over-year basis.  The company has expressed its intention to increase investment in its core products in the future.

Currently, Google has a Zacks Rank #3 (Hold).

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