Alphabet made $15 billion from ads on YouTube in 2019
On 3rd of February, Google had finally announced how much does it make from YouTube ads — for the fist time in 14 years since it acquired the service for 1.65B in 2006. And it is huge — Alphabet corporation received $15B in 2019 from YouTube ads.
Ads on YouTube amount for about 9% of Alphabet revenue as of now, and even niche experts were very surprised by the news.
So YouTube ad biz, which makes $15 billion a year, is:
– 20% the size of Facebook’s
– contributes 10% of all Google revenue
– 6x bigger than Twitch
– about 20 percent the size of entire US TV ad spent
And Google bought it for *only* $1.65 billion in 2006 https://t.co/JhtrYd6cEa
— Nick Statt (@nickstatt) February 3, 2020
YouTube’s ad revenue alone is bigger than the annual government budgets of:
?? Nigeria ($13.9bn)
?? Iceland ($10bn)
?? Estonia ($9.7bn)
— Chris Stokel-Walker (@stokel) February 3, 2020
YouTube’s revenue also continues to grow — it’s up 36% in 2019, from $11B in 2018.
Nowadays YouTube is perhaps the most popular video sharing website in the world — with over 2 billion users who watch over 250 thousand hours of videos daily.
The revenue mentioned doesn’t go to Alphabet alone. As Alphabet CFO Ruth Porat said on Monday, around $8.5B are the “content acquisition costs” which means these money goes to the video creators.
This became possible in part thanks to the creators who threatened to leave the platform after its acquisition by Google in 2006. The Internet giant caved and agreed to share, introducing its partnership program and allowing creators to monetise their videos.
And roughly half of it goes right back out the door to creators, record labels, and media companies. No reason it had to be like this, so thanks to everyone who threatened to leave YouTube in 2006 if they didn’t share revenue! https://t.co/pGPTr8T8xF
— Hank Green (@hankgreen) February 4, 2020
However, the bigger shock came right after: Instagram’s revenue topped YouTube’s by 5 billion. The app received $20 billion in advertising revenue in 2019.