Those seeking respite from the gloom enveloping the advertising industry found no solace in YouTube’s latest performance report on Tuesday. The video-sharing platform, owned by Alphabet and often considered an indicator for the creator economy, disclosed a 2.6% decline in ad revenue, amounting to $6.7 billion in the first quarter compared to the same timeframe last year. This marks the third consecutive quarter of dwindling revenue, a worse outcome than Google’s less-than-1% drop in total ad revenue. Executives attributed the slump to economic factors and advertisers’ frugality, the same factors that have recently resulted in a series of shutdowns and job cuts in the ad-supported media sector.
However, executives did emphasize areas where growth was evident, particularly with YouTube Shorts, a competitor to TikTok. Alphabet CEO Sundar Pichai reported that the number of channels uploading to YouTube Shorts daily surged by 80% this quarter, with most new subscribers for channels that started posting Shorts coming from viewers who encountered their Shorts content. “Creators are experiencing strong momentum with YouTube Shorts,” Pichai stated during an investor webcast.
Alphabet executives also underscored the ongoing progress of YouTube TV and YouTube Premium, the platform’s subscription services, as well as its shopping feature. Philipp Schindler, Google’s Chief Business Officer, revealed that over 100,000 stores have partnered with YouTube Shopping to sell products. “Our creator ecosystem and diverse content strategy will play crucial roles in driving YouTube’s long-term growth,” he asserted. “We aim to be a comprehensive hub for various types of video content.” Presumably, advertisers will have resumed their involvement by that point.