The decline of YouTube’s ad business is a sign of the declining online ad market. Major companies such as Microsoft and Alphabet reported disappointing earnings during the most recent quarters. During the third quarter of 2019, YouTube’s ad revenue fell 2% year-over-year to $7.07 billion. This was the first time that the company’s revenue had declined on a year-over-year basis since it started releasing its financial results in 2019.
Ruth Porat, YouTube’s chief financial officer, said during a call with investors that the company’s revenue decline was mainly due to the decline in advertiser spending. She noted that this was the result of companies cutting back on marketing and advertising due to the uncertainty of the economic situation.
Philipp Schindler, the chief business officer of Google’s parent company Alphabet, said that some of the companies that have slowed down their ad spending on YouTube were financial services, mortgage and insurance firms, and crypto. Last week, Snap reported revenue of $1.13 billion, which was below analyst expectations. Its shares immediately fell over 30%. In a statement, the company attributed the decline in its revenue to the weak economy. It said that many companies are also reducing their marketing budgets due to the uncertainty of the future.
The company’s news and search advertising business, which includes Microsoft News and Bing, experienced a 16% year-over-year decline in revenue during the September quarter. This is the fourth consecutive quarter that the growth rate of this business has been decreasing. It’s also a sign of the overall decline in the online advertising market.
During the same period, the growth rate of LinkedIn’s quarterly sales decreased to 17% from 42% in 2021. According to Amy Hood, the company’s chief financial officer, the decline in customer advertising spending was the main factor that affected the company’s search and marketing solutions.
Meta, another company that provides online marketing services, is expected to report its second-quarter results on Wednesday. It’s a clear indication of the current state of the online advertising industry. Given the recent earnings reports of major tech companies, it’s not surprising that Facebook would not provide any signs that the market is recovering.
Dil Bole Oberoi
