YouTube faces slowest ad growth in two years

Alphabet-owned video platform YouTube has experienced its slowest ad revenue growth in two years, the company has revealed. 

The platform generated US$7.34 billion in ad revenue in Q2 2022, growing 4.8% year-over-year. This is significantly lower than Wall Street estimates, with analysts expecting YouTube’s ad business to grow 7% YoY to US$7.49 billion. While it was closer to analyst expectations than Q1 – where YouTube missed predictions by more than US$600 million – the growth rate is still at the lowest point since 2020.

By contrast, YouTube’s ad business grew by 84% to US$7 billion in Q2 2021, though this was largely inflated as a result of the Covid-19’s initial impact on sales at the beginning and middle of 2020.

The figures, which were produced for Alphabet’s overall earnings, do not include subscription revenue from YouTube Premium and YouTube TV – the latter of which is established as the biggest vMVPD in the US with around 5 million subscribers. 

Alphabet finance boss Ruth Porat attributed YouTube’s ad sales slowdown to “pullback in spend by some advertisers” which reflect uncertainty around supply-chain and inventory issues. The exec also conceded that “extraordinary” growth in Q2 2021 would be hard to maintain.

Alphabet’s overall business reported US$69.69 billion in revenue (up by 13% YoY) and net income of US$16.0 billion (down 14%). This was short of Wall Street expectations of revenue at US$69.99 billion.