Wednesday, November 30, 2022

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    YouTube’s first-ever ad revenue decline heralds economic slump

    Video sharing giant’s ad sale revenues down 1.9% on Q3 2021.


    YouTube has endured a dismal third quarter as advertisers pulled up the drawbridge in response to an increasingly worrisome economic outlook – its first-ever decline in ad spend. 

    Over the three months to September 30, ad sale revenues declined 1.9% compared with a year earlier, down to $7.1bn, shattering the illusion that the streaming service was immune to broader economic malaise.

    As a result of these downward pressures, YouTube and Google’s parent company Alphabet now expects to generate sales of $69.1bn for the period, significantly below the $71bn figure previously expected.

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    Sundar Pichai, Alphabet’s chief executive, offered an excuse, however: “Financial results for the third quarter reflect healthy fundamental growth in search and momentum in cloud, while affected by foreign exchange. We’re working to realign resources to fuel our highest growth priorities.”

    Digital advertising has ridden a wave of enthusiastic investment throughout the pandemic but mounting skepticism of web and mobile advertising is exacting a heavy price on former darlings of the digital era, with Facebook owner Meta recording a second decline in revenue in quick succession.

    Only Amazon has been able to weather the storm after growing its digital ad business by 18% over the second quarter, even as global as spend growth slips from 9.1 to 8%.

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