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YouTube advertising revenues grew 46% to $6.9bn in Q4 2020


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Google and YouTube’s parent company Alphabet published its latest financial numbers yesterday, including advertising revenue figures for YouTube. They show a big bounce-back from the initial hit caused by the Covid-19 pandemic: YouTube ads made $6.89bn in the final quarter of 2020, up 46% year-on-year. That means YouTube advertising accounted for just over 12% of Alphabet’s overall revenues of $56.9bn for the quarter.

“After a substantial pullback at the outset of the pandemic, brand spending began to recover in the third quarter. Marketers realized that even if there was a pullback in consumer demand in the short term, they needed to keep their brands in front of people to stay top of mind when spending pick back up,” is how SVP and chief business officer Philipp Schindler described it to analysts in Alphabet’s earnings call. “In the fourth quarter, we saw significant acceleration of brand spending on YouTube.”

There was no new figure for the number of YouTube Music and YouTube Premium subscribers however: Schindler repeated the 30 million figure that YouTube announced in September 2020 when asked, as well as the “in 2019, YouTube paid the music industry over $3bn” stat that the company has cited before.

Schindler’s comment that “music is an incredibly popular vertical on YouTube and, obviously, a key part of the overall experience” is a quote you can expect to see repeated by music rightsholders and bodies in the coming months too, following recent media coverage of YouTube’s submission to the UK’s parliamentary inquiry into streaming economics focusing on its warning that music content might need to be “over-blocked” if new copyright legislation is (in YouTube’s eyes) “overbroad” in its requirements for online platforms.

There aren’t any shocks here though. Music is key for YouTube, and YouTube is key for music. Just as YouTube has helped a number of artists make money and connect with fans during the Covid-19 pandemic, so those musicians and music content has helped YouTube’s advertising revenues ride out the early hit. As the German and (more recently) Danish music industries can tell you, YouTube has been prepared to follow through on music blocks during disputes, but as ever,  finding a more positive way forward must be the priority for both sides.

 

Photo by Christian Wiediger on Unsplash


Written by: Stuart Dredge