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YouTube ad revenue is down, is TikTok to blame?

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Is TikTok to blame ? : The company assures that the slowdown of the platform is linked to the global environment with problems in the supply chain, inflation and wars, but does not mention its aggressive competition.

Alphabet , the company that owns Google, YouTube and Waze, has released its revenue for the first quarter of 2022 and YouTube , which for years has been the company’s advertising sales workhorse, fell short of the goal that was set. had set. According to the report, the video platform had a total income of $6,870 million dollars during the first three months of 2022. Although this is 15% more than in the same period of the previous year ($6,000 million dollars), it represents a drop of $130 million vs. Q2 quarter 2021 ($7.0 billion), $335 million less than Q3 ($7.2 billion) and $1.735 million less than Q4 ($8.63 billion). The video platform’s goal for Q1 2022 was $7.48 billion.

Although the drop may have to do with seasonality (the last quarter of the year tends to be more active in advertising than the first), the slowdown in advertising revenue on YouTube is difficult to refute and points to problems stemming from the Russian invasion of Ukraine, inflation and the disruption in the supply chain that companies face given the global conflict. However, there is an additional factor: it is called TikTok .

The magnet of the Chinese social network

TikTok, the Chinese social network owned by ByteDance , has not stopped growing its advertising revenue despite the problems facing the world. According to an Insider Intelligence report, in 2022 the Chinese social network will generate an income of more than $11 billion dollars, tripling what it obtained during 2021. Of that figure, $6 billion correspond to the United States where TikTok will have growth in income of 184.5%.

But it’s not just TikTok, platforms like Twitch , owned by Amazon that allows users to broadcast live, have drawn the attention of both content creators and viewers who now have more options to consume information.

Aware of the situation, YouTube launched YouTube Shorts in September 2020, a section within the platform that allows users to upload short videos very similar to those of Instagram and TikTok. Although Shorts has managed to substantially grow its audience (this format has more than 30,000 million daily views) it still does not have a monetization option and the presence of advertising is still in a beta phase.

In total, Alphabet reported a revenue of $68,001 million dollars during Q1 of 2022, an increase of 27% compared to the same period of the previous year, although slightly below expectations ($68,110 million dollars).

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Samuel Kwame Boadu