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Sound the panic klaxons! YouTube’s advertising revenues were down 1.9% year-on-year in Q3: a rare decline for one of tech firm Alphabet’s key business lines. Perhaps muffle those klaxons though: YouTube still brought in $7.07bn of advertising revenue last quarter.

What’s behind the decline? In Alphabet’s earnings call for its quarterly financial results yesterday, SVP and chief business officer Philipp Schindler talked about “a decline in user engagement in gaming from the elevated levels seen earlier in the pandemic” as well as “a pullback in spend by some advertisers” that began in Q2 and “increased in the third quarter”.

Schindler and other Alphabet executives on the call made it clear that the newly-launched ads within YouTube Shorts will be key to a hoped-for turnaround. “1.5 billion users every month, 30 billion daily views. Engagement is strong,” he said, adding that “it’s early but we’re encouraged by the progress we’ve made this year in Shorts monetisation”.

Music was barely mentioned, although chief financial officer Ruth Porat did say that YouTube Music is still seeing growth in subscribers.

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