YouTube Reports First-Ever Quarterly Drop in Ad Sales

(Image credit: Alphabet)

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%.

Also read: Verizon and Snap Q3 Earnings Foretell Coming Hard Times For the Media Biz

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. ■

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!