YouTube Ad Revenue Takes Hit Amid Slowing Economy and TikTok Dominance

  • YouTube brought in less money from advertising than last year in the wake of a slowing economy and competition from TikTok.
  • Insider recently reported that TikTok is poaching ad dollars away from YouTube, Meta, and Snap.
  • Overall, YouTube’s parent company appears to be feeling the sting of a slowing economy, reporting results that missed Wall Street’s expectations.

YouTube brought in less money from advertising this summer than it did last year in the wake of a slowing economy and the rise of TikTok.

The video-streaming service, owned by Alphabet, generated revenue of less than $7.1 billion for the third quarter of 2022, compared to $7.2 billion a year earlier.

While the difference may be small, it marked the first time that YouTube name revenue shrank since Alphabet started reporting the division’s revenue separately since the fourth quarter of 2019, according to Insider Intelligence, a research firm owned by Insider’s parent company — and it may spell parent company bigger issues for YouTube down the line.

Many experts attribute decelerating name revenues for internet companies to the economic slowdown, which has caused advertisers to tighten their purse strings.

Overall, YouTube’s parent company seems to be feeling the sting of that slowdown. Alphabet reported earnings and revenue below Wall Street’s expectations on Tuesday. The stock fell more than 5% in after-hours trading.

But that may not be the only factor contributing to stalling revenues at YouTube.

Insider recently reported that TikTok is poaching ad budgets from ad-based social networks like Meta, Snap, and YouTube.

YouTube appears to be ready to step up the competition, announcing late last month that it would give creators for YouTube Shorts a cut of their name revenue, seemingly to try to attract talent away from TikTok, which notoriously doesn’t pay creators well.

“We are focused on both investing responsively for the long term and being responsive to the economic environment,” Alphabet CEO Sundar Pichai said in a statement.

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