First, a disclaimer: I’m no expert, and I only know what is on these documents I linked. I haven’t read in-depth reporting by real investigative journalists, nor any reporting sourced or quoted from YT insiders (When I see articles about the ad-blocking, I knock wood that SmartTube is still working and keep scrolling, keen to avoid getting angry at another trillion-dollar company).
I’ve been doing some light research into Alphabet’s YT ad revenue numbers today on my lunch hour. Here is where you find that info.
My curiousity was piqued by a few posts here and elsewhere regarding YouTube’s new push to eliminate ad-blockers that indicate the push is because they’ve been losing money. Per my plebian understanding of these documents: Rather than a substantial decrease, YT had finally seen a ‘leveling off’ of ad revenue that had previously been enjoying explosive growth for the available history I can view. The historical (according to the data I have available to me) 32-43% increase in revenue leveling in 2022 to almost -2% is likely responsible for this push to more vigorously monetize users.
It’s not easy to relate to earnings when they have to be counted in “thousands of millions” of dollars, but if we reduce it all to simple percentages, I suppose we can agree at least that the data they are working from does show a drop in revenue. I suspect (as many do) that the loss in revenue growth in Q3 2022 could at least motivate them to look for ways to make more growth. Where we may find debate is on the concept that growth must continue into infinity.
#Notes
The links below are for Q3, so we’re comparing apples>apples.
Earnings are provided in millions ($1,000 = $1B)
My percentages after the link include ONLY YouTube Ad revenues, not the rest of YT revenues, which are liumped into “Google Other.”
Revenue!=Profit, and YT expenses are hard (read:impossible) to discern from this simplified report.
Q3 2020, YT ad revenue up 32.42% from same period in 2019 ($3.80B to $5.03B).
Q3 2021, YT ad revenue up 43.04% from same period in 2020 ($5.03B to $7.20B).
Q3 2022, YT ad revenue down 1.86% from same period in 2021 ($7.20B to $7.07B).
Q3 2023, YT ad revenue up 12.45% from same period in 2022 ($7.07B to $7.95B).
I’ve enjoyed the discussion on this topic, with good points being made all over, like how we can’t lose sight of the value a non-ad-viewing user brings to YT simply by watching and increasing viewer counts, subscribing, donating super chat or otherwise, and linking/sharing videos elsewhere.
Lastly: My lunch break is over; I can’t respond to any comments for a while, so this is a post-and-run.
#YouTube #Google #EarningsReport #AdBlocker
EDIT: @db0@lemmy.dbzer0.com if this doesn’t fit the sub please let me know or remove.
One point I forgot to make above: I’m not sure if we can say the Q3 2023 revenue growth can be related to the new ad-blocking-blocking or not, but I suspect there’s a piece of that in there.
The analysis I read was similar but reached a different conclusion: google had been caught charging for ads that were never seen. Something in the realm of a billion dollars in ad money that was collected supposedly for viewed ads but which actually ran on 0 view videos, etc.
Obviously that would be very bad, so they started crediting advertisers and began the ad-block enshittification.
After reading the adalytics report, it sounds more like ads that were meant to be viewed mid-stream and (presumably) on YouTube content, only when clicked, were instead served on auto-play, looping and muted on third-party websites that donn meet the standards of the sold product.
So like you said, but it seems more that buyers thought their ads would run on certain locations and circumstances that ensured higher viewer interest, and instead were being charged for ads played off screen, behind other ads, and some even viewed by “declared bots”.
It doesn’t matter if they’re making money. Google/Alphabet is a for-profit company. A big part of this means they have to make as much money as possible. MBA programs literally teach that any unrealized potential profit is lost money.
They could rake in a trillion dollars in ads, and they’d still do this if it meant they could get 1.1 trillion instead.
It’s more of a long term strategy to reign in control of how people “consume” the internet. Google wants an ad on your desktop. They want your browser to stop, just like YouTube videos, to show you a brief 20s ad spot.
They are embolden now because they have amassed a massive user base with Chrome and all its ill gotten derivatives. And the EU eyeballing big tech is likely putting a fire under their ass.
And yes, when ad revenue drops, that tends to focus an ad company. With that said, they have only been increasing ad spots and their length over recent years and that has not had the impact from your data. So…
But yeah, all these companies are just working tireless to as many put locks on the net as possible to force you into more subscriptions, which are what companies are all about. Passive incoming has always been absolute gold.
Well said, and the things you’ve listed are why I’ve begun to de-google myself. After decades of wishing they’d fix certain products and features or compromising just to keep everything under one roof, I’m done with them.
I appreciate the role they played in helping shape the internet, but I won’t be a part of helping them try to kill it.
YouTube advertising works a little differently to, say, Facebook. For advertisements longer than 30 seconds, the advertiser doesn’t pay if the user hits “Skip”. Ad-blocking users are far less likely to watch ads to completion, so I can imagine this having almost no impact on conversion.
I believe this change, if it is successful in blocking ad-blockers, will generally be detrimental to advertisers. It means advertisements shorter than 30 seconds (so, unskippable ads) are now shown to a larger proportion of people unlikely to be interested or paying attention to the advertisement. It’s beneficial to YouTube because they can claw back some of the money they spend serving ad-blocking users videos—that ain’t free. That being said, YouTube is still probably one of the most friendly big platforms to advertisers because of how flexible they are. While it uses the Google Ads system, it’s more friendly than Google search ads…
I missed an opportunity to ask someone who did a lot of YouTube advertising whether they noticed any impact at all from the recent ad-blocker blocking change recently, so this is all speculation.
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One point I forgot to make above: I’m not sure if we can say the Q3 2023 revenue growth can be related to the new ad-blocking-blocking or not, but I suspect there’s a piece of that in there.
The analysis I read was similar but reached a different conclusion: google had been caught charging for ads that were never seen. Something in the realm of a billion dollars in ad money that was collected supposedly for viewed ads but which actually ran on 0 view videos, etc.
Obviously that would be very bad, so they started crediting advertisers and began the ad-block enshittification.
See https://www.tumblr.com/beesmygod/734866804959281152/google-vehemently-denies-the-reports-findings-and for more
Thanks for the comment and link
After reading the adalytics report, it sounds more like ads that were meant to be viewed mid-stream and (presumably) on YouTube content, only when clicked, were instead served on auto-play, looping and muted on third-party websites that donn meet the standards of the sold product.
So like you said, but it seems more that buyers thought their ads would run on certain locations and circumstances that ensured higher viewer interest, and instead were being charged for ads played off screen, behind other ads, and some even viewed by “declared bots”.
Yikes. Refunds (credit, excuse me) indeed.
I saw this coming when they kept showing me 2 hour long ads midroll in 10 minute videos
I would assume they would have to take reserves on their books if this “mistake” really ran in billions
It doesn’t matter if they’re making money. Google/Alphabet is a for-profit company. A big part of this means they have to make as much money as possible. MBA programs literally teach that any unrealized potential profit is lost money.
They could rake in a trillion dollars in ads, and they’d still do this if it meant they could get 1.1 trillion instead.
It’s more of a long term strategy to reign in control of how people “consume” the internet. Google wants an ad on your desktop. They want your browser to stop, just like YouTube videos, to show you a brief 20s ad spot.
They are embolden now because they have amassed a massive user base with Chrome and all its ill gotten derivatives. And the EU eyeballing big tech is likely putting a fire under their ass.
And yes, when ad revenue drops, that tends to focus an ad company. With that said, they have only been increasing ad spots and their length over recent years and that has not had the impact from your data. So…
But yeah, all these companies are just working tireless to as many put locks on the net as possible to force you into more subscriptions, which are what companies are all about. Passive incoming has always been absolute gold.
Well said, and the things you’ve listed are why I’ve begun to de-google myself. After decades of wishing they’d fix certain products and features or compromising just to keep everything under one roof, I’m done with them.
I appreciate the role they played in helping shape the internet, but I won’t be a part of helping them try to kill it.
Oh they don’t want to kill it, just own it 🙃
Maybe a different perspective could help?
YouTube advertising works a little differently to, say, Facebook. For advertisements longer than 30 seconds, the advertiser doesn’t pay if the user hits “Skip”. Ad-blocking users are far less likely to watch ads to completion, so I can imagine this having almost no impact on conversion.
I believe this change, if it is successful in blocking ad-blockers, will generally be detrimental to advertisers. It means advertisements shorter than 30 seconds (so, unskippable ads) are now shown to a larger proportion of people unlikely to be interested or paying attention to the advertisement. It’s beneficial to YouTube because they can claw back some of the money they spend serving ad-blocking users videos—that ain’t free. That being said, YouTube is still probably one of the most friendly big platforms to advertisers because of how flexible they are. While it uses the Google Ads system, it’s more friendly than Google search ads…
I missed an opportunity to ask someone who did a lot of YouTube advertising whether they noticed any impact at all from the recent ad-blocker blocking change recently, so this is all speculation.
You have to remember the shareholder mentality: If you’re not growing by 20% forever, you’re losing money.