Alphabet, Google’s parent company, has just released the ad revenues for YouTube and Google for the fourth quarter of 2019 as well as net revenue made in 2019. The net 2019 revenue for all of Alphabet’s products is estimated at $162 billion. The total Google ad revenue for 2019 is $134.8 billion, whereas YouTube made $15 bn in 2019.
Alphabet’s annual earnings exceeded the expectations of analysts, despite the fact that the revenue for Q4 was lesser than the estimated figure. In Q4, Alphabet netted $46.07 bn in revenue, which is approximately $870 million less than the projected revenue for Q4.
Alphabet also revealed that its cloud service has a $10 bn run rate.
2019 Ad Revenue Comparison
Source: Company earnings reports
In terms of ad spending, Google, Facebook and Amazon are the top three digital platforms. It’s noteworthy that Google’s net revenue for 2019 is almost double that of Facebook’s ad service, which is approximately $70 bn. Amazon, which is the third-largest digital ad platform, lags behind YouTube in revenue by approximately $900 million for the year 2019.
What It Means for Internet Marketers
Digital Ad Spending Is On the Rise
While Alphabet may have struggled in achieving the projected figures for Q4 of 2019, there is no denying that digital ad spending is continuously on the rise in 2019. Additionally, this trend will continue in 2020.
Traditional Ad Spend is Declining
It’s worth noting that YouTube is now making more than the US traditional media channels, such as newspapers, consumer magazines, trade magazines, out-of-home, yellow pages and more.
Google is Striving to Improve its Ad Policy
We’ve seen Facebook severely criticized for profiting off disinformation and deceptive ads. To avoid facing similar accusations, Google recently released a policy for handling disaffirmation on its ad platforms like YouTube. In the company’s own words, it has “developed policies that prohibit deceptive practices and abuse such as voter suppression and misrepresentation in our products, including Google Ads, YouTube or Google Play.”
This is the First Time Alphabet has Revealed YouTube’s Ad Revenue in 15 Years
An interesting point to note is that this is the first time Alphabet has revealed the ad revenue for YouTube ever since its acquisition back in 2006 for $1.65 billion. It is mind-boggling to note the kind of growth YouTube has seen as part of Google in the past decade and a half, growing into a $15 billion-a-year business.
YouTube is Making a Fifth of Facebook’s Ad Revenue and is Six Times Larger than Amazon’s Twitch
When it comes to video platforms, YouTube and Facebook actively compete against one another. While that ratio may change in the future, YouTube made about a fifth of Facebook’s ad revenue in 2019.
At the same time, YouTube netted about six times the revenue of Amazon’s live video streaming service, called Twitch.
In a separate announcement, Google revealed that YouTube’s premium (ad-free) service and music premium service now have more than 20 million subscribers. It also boasted 2 million subscribers of its paid TV service.
Alphabet bundled the revenue from these products in the “Other” category, which netted $5.3 billion in Q4.
YouTube’s Own Phenomenal Growth Revealed
If we compare YouTube’s growth for the first three quarters with that of the fourth quarter, it gives us insight into YouTube’s own phenomenal growth. Of the $15 bn revenue earned in 2019, the platform accumulated $10 bn in the first three quarters, whereas the revenue of Q4 alone is $5 bn.
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