YouTube’s ad revenue will reach a total of $30.4bn this year, according to WARC Media’s latest Platform Insights report.
YouTube’s ad revenue is set to increase by 4.0% this year.
Meanwhile, WARC Media forecasts a 10.3% ad revenue growth in 2024 to $33.5bn.
Lately, the digital advertising industry has been experiencing a global slowdown in investment, affecting various platforms. YouTube has been particularly impacted; this decline can be attributed to marketers shifting their investments towards retail media and search, as well as increased competition from TikTok, Instagram Reels, and Apple’s ATT.
“It’s been a tricky 12-month period for YouTube, which is increasingly battling on two fronts, against short-form video platforms like TikTok as well as long-form content streamers in the connected TV space. However, as trading conditions improve in digital advertising, YouTube can expect to see revenue growth improve,” Alex Brownsell, Head of Content, WARC Media, says.
This year, however, the growth rate of YouTube’s ad revenue is more than double the rate observed in 2022, indicating a recovery in ad revenues expected during the second half of the year.
Retail continues to be the primary category for ad investment on YouTube, with retailers expected to spend $4.1bn on YouTube ads.
According to WARC Media data, we will see an increase in YouTube ad spend among the technology and electronics sectors, as well as toiletries and cosmetics industries. Attaining growth from other sectors however has proven to be more challenging.
As YouTube’s global advertising investment is expected to reach $30.4bn, the video platform is actively seeking avenues to establish stronger connections with viewers, creators, and brands through the implementation of multi-format video strategies. YouTube is prioritising Shorts and Connected TV engagement. Its unskippable 30s ads and “pause experiences” on TV help marketers engage audiences across screens and achieve both performance and brand building goals.
The recently-introduced YouTube Shorts (videos lasting 60 seconds or less) aims to improve user engagement, make the platform more shoppable, and provide more opportunities for marketers to reach new audiences. However, Shorts’ daily viewership of 50 billion falls significantly short of the 140 billion daily views attained by Instagram Reels. Additionally, individuals under the age of 18 spend, on average, 60% more time on TikTok compared to consuming content on YouTube, the WARC report states.
