YouTube Ad Revenue Inches Up 4.8% in Q2, Slowest Growth in More Than Two Years

YouTube still banks a huge bucket of ad bucks — hitting $7.34 billion in the second quarter — but the video giant’s growth has decelerated to its lowest pace in more than two years.

YouTube’s ad revenue grew just 4.8% in Q2, according to Alphabet, the parent of Google and YouTube. That was under Wall Street expectations: Analysts had forecast YouTube ad revenue increasing 7% year over year to $7.49 billion. The results come after YouTube’s Q1 ad sales had missed estimates by a wider margin.

YouTube saw a 84% revenue boom in the same period last year, to $7 billion, coming off the relatively anemic 5.8% bump in Q2 2020 amid the onset of the coronavirus pandemic. Alphabet first broke out YouTube ad revenue for the 2019 calendar year.

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Overall, Alphabet slightly missed earnings forecasts. The internet giant reported $69.69 billion in revenue, up 13%, and net income of $16.0 billion, or $1.21/share. Wall Street consensus estimates had pegged revenue at $69.99 billion and earnings of $1.30/share, per Refinitiv data.

In addition to macroeconomic headwinds like rising inflation, analysts have speculated that YouTube ad dollars are softening because YouTube Shorts, the platform’s surging TikTok-like short-video feature, is siphoning viewing off the core, longer-form side of the house. Google last month boasted that YouTube Shorts has more than 1.5 billion monthly logged-in users, while it began testing ads for short-form videos only in the last few months.

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