Alphabet reported Tuesday its latest earnings, citing that YouTube saw ad revenue fall 2.6% year over year as advertisers pulled back from the platform due to economic uncertainty. YouTube only raked in $6.69 billion in advertising revenue for the first fiscal quarter of 2023 compared to the $6.87 billion during the same period last year.
\nDespite the disappointing number, YouTube managed to slightly beat analysts’ expectations of $6.6 billion.
\nThis is the third quarter in a row that YouTube’s ad revenue decreased. The downward sliding figures are a cause of concern for content creators, who look to ad revenue to earn income.
\nThe company attempted to offer reassurance during Tuesday’s earnings call, choosing to focus on its success with the short-form video feature Shorts.
\n\u201cLast year the number of channels that uploaded to Shorts daily grew over 80%. Those posting weekly on Shorts saw the majority of new channel subscribers coming from their Shorts posts,\u201d Sundar Pichai, CEO of Google and Alphabet said.
\nAs the platform experiences intense competition from rivals like TikTok, the company continues to focus on the Shorts to boost its growth. In November 2022, YouTube rolled out Shorts to smart TVs. Google announced in February that Shorts has reached 50 billion daily views.
\n\u201cWe’re seeing strong watch time, growth\u2026 monetization is also progressing nicely. People are engaging and converting on ads across Shorts at increasing rates,\u201d added Philipp Schindler, Google’s chief business officer.
\nYouTube also reiterated plans to ramp up its efforts to make YouTube more shoppable. The company partnered with Shopify last year to enable YouTubers and merchants to feature products on their channels.
\n\u201cShopping on YouTube\u2026 It’s still super early days. One highlight last year, we brought shopping to more creators and brands by partnering with commerce platforms like Shopify. Now more than 100,000 creators, artists and brands have connected their own stores to their YouTube channels to sell their products. We’re excited about the potential ahead,\u201d Schindler said.
\nThe company confirmed to TechCrunch in November that it plans to add shopping features to Shorts.
\nOverall, parent company Alphabet reported $69.8 billion in revenue for the first quarter of 2023, a 3% increase from the same year-ago period.
\nYouTube CEO Susan Wojcicki stepped down from her role in February, taking on an advisory role across Google and Alphabet. Neal Mohan, chief product officer, is the new CEO.
\nIn January, Alphabet cut 6% of its workforce, which affected 12,000 employees.<\/p>\n
YouTube Shorts begins testing shopping features and affiliate marketing<\/p>\n