YouTube ad revenue surges 15% to $10.3 billion, driven by direct response and brand campaigns
Short form continues to pull its weight. In the U.S., YouTube Shorts now earns more revenue per watch hour than traditional in stream on YouTube.
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YouTube’s advertising business accelerated this quarter, with YouTube advertising revenues up 15 percent to 10.3 billion, driven first by direct response and then by brand. Google Services revenues rose 14 percent to 87.1 billion, reflecting strength in Google Search, YouTube advertising, and Subscriptions. Across Google Services, management noted that year over year comparisons in Advertising in the coming fourth quarter will be negatively impacted by strong U.S. election spend in Q4 2024, particularly on YouTube. YouTube’s performance marketing toolbox kept improving. The company rolled out over 100 launches that lifted conversion value by more than 40 percent for advertisers using target based bidding on YouTube. Retail continues to lead YouTube’s growth, with Demand Gen helping the platform further monetize shopping related categories.
In the living room, YouTube has remained number one in U.S. streaming watch time for more than two years, according to Nielsen. Last month marked YouTube’s first ever live NFL broadcast. The exclusive global stream from Brazil drew more than 19 million fans and set a record for most concurrent viewers of a live stream on YouTube.
Short form continues to pull its weight. In the U.S., YouTube Shorts now earns more revenue per watch hour than traditional in stream on YouTube.
Creator tools and subscriptions are reinforcing the flywheel. At the Made on YouTube event, the company rolled out AI powered features to help creators supercharge creation and build their businesses. Subscriptions also gained momentum, with strong growth in YouTube Music and Premium and YouTube TV. On average, a YouTube Music and Premium subscriber generates higher gross profit than an ad supported user, which strengthens the twin engine monetization strategy that combines advertising and subscriptions.
Costs reflect the platform’s scale. Other Cost of Revenues rose to 26.5 billion, primarily driven by content acquisition costs, largely for YouTube, followed by depreciation and other technical infrastructure operations costs.
Leadership framed YouTube’s role inside Alphabet’s broader mix. The company highlighted its diversified growth with successful businesses in Cloud, YouTube, and Subscriptions, and reiterated the flywheel that starts with creators, attracts viewers at massive scale, and monetizes through both ads and subscriptions.
