Google Lifts The Lid On YouTube’s Ads Business For The First Time

Google’s parent company Alphabet has finally revealed the true financial value of video platform YouTube.

The company has previously not shared the exact financial details of its YouTube business, instead including it simply as part of ‘Google’.

But in its Q4 results released today, Google confirmed what many already knew: YouTube is a multi-billion dollar business.

For the year of 2019, YouTube delivered $US15.2 billion ($22.6 billion) in ad revenue, which was up 36 per cent from 2018.

With an estimated 2 billion global users on YouTube, this is around $US8 per user in monetisation – a figure Alphabet and Google CEO Sundar Pichai acknowledged still has “more room” to grow.

YouTube’s advertising business has now nearly doubled from $US8.15 billion in 2017.

YouTube’s ad revenue for Q4 alone was $US4.7 billion, although company CFO Ruth Porat did acknowledge it to have been a “seasonally strong” quarter for the platform.

YouTube’s non-advertising revenue was also significant.

There are now over 20 million YouTube Premium and YouTube Music and 2 million YouTube TV subscribers, contributing to $US3 billion in revenue.

Pichai also mapped out the roadmap for YouTube moving forward.

“YouTube is working horizontally at scale,” he said.

“For us, it’s making sure as an ecosystem it works better, so that the content and experiences there are improving.

“We take our content responsibility work seriously, which makes more content creators engage and makes it a more valuable product for advertisers as well.”

He also flagged a desire to make YouTube more “contextually relevant”, as Google’s Search ads have.

In terms of Google’s wider advertising business, Q4 saw a record $US37.9 billion in revenue for advertising.

It marked Alphabet’s first financial results since Google announced it would phase out third-party cookies on Chrome.

When asked if he anticipates any “headwinds” coming in the shape of shifting privacy regulations and attitudes, Pichai said the company is looking to stay one step ahead.

“We have engaged in these issues and we anticipate and structurally work on them early on,” he said.

“There will be continued changes in these ecosystems and our ability to anticipate and adapt is key to the years ahead.”

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