Google’s YouTube marked advertising and subscription revenue growth in the third quarter of 2024, where enabling experiences for the living room TV screen continues to be a strategic focus.
YouTube ads revenue in Q3 increased by nearly $1 billion compared to the same quarter of 2023, reaching $8.9 billion for the three months ending September 30, up 12% year over year. Google-parent Alphabet said the growth was driven by brand advertising products, followed by direct response ads offerings, both of which saw increased spend by advertisers in the quarter.
Google Network advertising revenues declined by $121 million compared to the prior year quarter, landing around $7.5 billion in Q3, representing a 2% yoy dip that Alphabet attributed to unfavorable foreign currency exchange rates.
Total Google advertising, inclusive of its massive search business (which generated $49.3 billion in the quarter) was up more than $6 billion for a Q3 total of $65.85 billion.
Google subscriptions, platforms and devices, grew to $10.65 billion in Q3, up from $8.3 billion in the same period a year ago, driven by subscriptions and devices. Alphabet said an increase in subscription revenue was primarily from the number of paid subscribers for YouTube services, mainly driven by virtual MVPD YouTube TV and YouTube Music Premium subscriptions.
On the earnings call Tuesday, Alphabet and Google CEO Sundar Pichai said that it marks the first time YouTube’s combined ad and subscription revenue over four consecutive quarters surpassed $50 billion.
The main YouTube platform continues to be the dominant streamer in terms of share of U.S. TV time each month, per Nielsen. Google execs have previously cited the living room as “YouTube’s next frontier” with a focus on further developing products and experiences via CTV and subscriptions.
In terms of YouTube’s attention on CTV, creators are increasingly utilizing formats meant for the bigger screen.
“The number of creators making the majority of their YouTube revenue on TV screens is up more than 30% year on year,” said Philipp Schindler, SVP and CBO at Google, on the earnings call. Paris 2024 Olympics also saw traction on YouTube – with more than 12 billion views on the platform – and in the living room. According to Schindler more than 850 million unique viewers watched over 40 billion minutes of 2024 Olympics content, 35% of which was viewed on the TV screen.
Strength of viewing at YouTube also helped the company capture more at this year’s Upfronts, where Schindler said ad sales commitments were up 20% year on year.
Asked on the call by analysts about engagement for long-form and short-form content and monetization on YouTube compared to consumption, Schindler said watch time continues to grow across YouTube “with particular strength in Shorts and in the living room.” Over 70 billion YouTube Shorts are watched each day, he added. And Shorts this month got a little bit longer. Since October 15, YouTube started allowing creators to upload Shorts that are up to three minutes long, which the company said was a top-requested feature.
As for monetization, he said the gap continues to narrow between monetization of Shorts versus in-stream video advertising, particularly in the U.S. Google’s also working to give brands new means of reaching audiences consuming YouTube Shorts.
“I talked about advertisers now being able to book First Position on Shorts blocks. That’s exciting,” Schindler continued. “Shorts are also integrated into video reach campaigns, YouTube Select. You are really giving brands precise targeting options here. We are pleased with the progress we’re making here.”
And Google’s extending AI tools to creators on YouTube. Last month the company announced Veo, its Google Deepmind AI-based video generation model, is being integrated into YouTube Shorts for use by creators later this year.
