For the first time ever, Google reported a quarterly decline in advertising revenue for YouTube, with sales dropping 1.9% in the third quarter to just over $7.07 billion.
It’s perhaps the clearest indicator yet that the technology-media-telecom business is in for some choppy economic waters as it gets set to close out 2022.
Notably, in the third quarter of 2021, YouTube ad revenue grew by 43%.
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The performance fell well short of equity analysts' consensus forecasts, with Google delivering total revenue of $69.1 billion vs. expectations of $70.6 billion.
Google CFO Ruth Porat told equity analysts during the company's Q3 call Tuesday afternoon that declines for YouTube, as well as the mega-profitable Google Search, “reflect a pullback in spend by some advertisers, as we first noted last quarter.”
Expecting headwinds and tough comparable metrics in coming quarters, Google said it's developing new ways to monetize YouTube Shorts, the short-form video platform it launched in response to TikTok.
“We’re sharpening our focus on a clear set of product and business priorities,” said Sundar Pichai, CEO of Alphabet and Google.
Google typically does not break out revenue or subscriber performance for subscription services, including vMVPD YouTube TV. In its second quarter call, it revealed that the platform had surpassed 5 million users. ■
