YouTube’s global advertising revenue is set to grow 4.0% in 2023 to reach $30.4bn – double the rate of growth recorded last year according to new data from Warc as part of its Platform Insights report.
Despite the slowdown in the digital ad market, YouTube remains popular among consumers reaching half of all internet users globally (2.07 billion), and commands a strong position in the online video advertising market. More than one billion hours of video are watched every day on YouTube globally. In the US YouTube is the biggest TV streaming platform since overtaking Netflix said Warc.
A WARC survey of marketers in Asia Pacific found that YouTube is the most popular platform for digital display. Nearly half (49%) of brands in the region run display ads on YouTube. However, it appears less appealing to APAC marketers (17%) from a shoppable advertising perspective.
APAC is a key growth region for YouTube – from live shopping and Shorts to gaming. “The region’s high mobile penetration, advanced e-commerce, and influencer culture has helped to shape YouTube’s global strategy,” say Warc
The platform is prioritizing Shorts and Connected TV engagement and is innovating with unskippable 30s ads and “pause experiences” on TV to help marketers engage audiences across screens and achieve both performance and brand building goals.
“It’s been a tricky 12-month period for YouTube, which is increasingly battling on two fronts, against short-form video platforms like TikTok as well as long-form content streamers in the connected TV space,” said Alex Brownsell, Head of Content, WARC Media.
“However, as trading conditions improve in digital advertising, YouTube can expect to see revenue growth improve.
Ad investment with YouTube is set to rise 4.0% this year to a total of $30.4bn
The worldwide slowdown in digital ad investment has had an impact across the industry. However, Warc added, YouTube has been hit harder than most. Q4 2022 ad revenue declined 8.8% year-on-year, as marketers shifted investment to retail media and search and it battled against TikTok, Instagram Reels and Apple’s ATT.
This year, YouTube’s ad revenue is set to rise 4.0% to a total of $30.4bn. This is more than double the rate of growth recorded in 2022, with ad revenues expected to recover in the second half of this year.
As trading conditions become more favourable, WARC Media forecasts YouTube’s revenue growth to accelerate 10.3% in 2024, to reach $33.5bn by the end of the year.
Retail remains YouTube’s most important category for ad investment: retailers are expected to spend $4.1bn on YouTube ads this year, a 4.6% rise on 2022, according to WARC Media data.
Yet growth from other sectors has been harder to achieve. WARC Media data forecasts an increase this year in technology and electronics (+8.0%) and toiletries and cosmetics (+4.3%).