YouTube Ad Revenues Surge 46% in Q4 2020 to Nearly $7 Billion

Google parent company Alphabet had a blockbuster Q4 2020, thanks in part to YouTube ad revenue.

According to the research data analyzed and published by Comprar Acciones, there was an increase of 23.5% in revenue during the period to $56.9 billion. Earnings per share (EPS) soared by 45.3% to $22.30, against an expected $15.90.

Based on data from Statista, YouTube’s global advertising revenue in the quarter totaled $6.89 billion, up by 46% year-over-year (YoY). In that period, Google search and other ad revenue sources rose from $27.2 billion in Q4 2019 to $31.9 billion in Q4 2020.

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During the first half of 2020, the early stages of the pandemic negatively impacted YouTube’s business. But it staged an impressive recovery in the second half as business and consumer activity regained adapted to the new normal.

Its ad revenue in Q1 2020 amounted to $4.04 billion, up from $3.03 billion in Q1 2019. But it was a significant decline from Q4 2019’s total of $4.72 billion. The figure fell further in Q2 2020 to $3.81 billion, before a remarkable rebound to $5.04 billion in Q3 2020.

On an annual basis, YouTube’s ad revenue for 2020 amounted to $19.78 billion, up from $15.15 billion in 2019. The figure accounted for roughly 10% of Google’s annual revenue, which was $181.69 billion.

YouTube’s ad revenue for 2020 was roughly a quarter of Facebook’s. According to Statista, Facebook’s ad revenue in 2020 totaled $84.17 billion, accounting for 97.9% of the platform’s global revenue. Together, YouTube and Facebook accounted for 49% of online video ad revenue in 2020. The duopoly’s share of the market is expected to surge to 51% by 2024.

Courtesy of the COVID-related online video consumption surge, Omdia estimates that video accounted for 47% of online display ad revenue in 2020. It projects that the share will increase to 52% by 2024 seeing as the trend is here to stay.

YouTube’s Creators Have Earned More Than $30 Billion Over Past Three Years

Content creators are among the key beneficiaries of YouTube’s overall performance. According to a letter by the platform’s CEO Susan Wojcicki, YouTube has paid out over $30 billion over the past three years. Besides creators, other recipients of the payment include artists and media organizations.

Almost all YouTubers earn most of their income from ad revenue that their videos generate. In the period between June 2019 and June 2020, the highest earning YouTube star raked in $29.5 million. Ryan Kaji, who had 41.7 million subscribers at the time, accumulated 12.2 billion views on his channel.

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Mr. Beast (Jimmy Donaldson) came in second, with $24 million from 3 billion views and 47.8 million subscribers. The five brothers who make up Dude Perfect ranked third with $23 million in earnings. They had 2.77 billion views and 57.5 million subscribers.

YouTube Generated $992 Million Globally in 2020 from Mobile Consumer Spending

Illustrating its massive popularity in 2020, YouTube was the top mobile app by subscriber spending during the year. According to data from Sensor Tower, it grossed $991.7 million from its worldwide user base and $562 million from the US alone.

Additionally, it was the highest earning subscription app on the Apple App Store. But on Google Play Store, Google One clinched the top spot, generating $445 million globally and $255.7 million in the US.

Consumers have in recent years started spending more on subscription apps than they did in the past. Between Q1 2019 and Q4 2020, every successive quarter has seen an increase in total spending on these apps. During Q4 2020, this group of apps posted a 31% increase in consumer spending, from $1.3 billion in Q1 to $1.7 billion.

For the full year 2020, global consumer spending on the top 100 non-game subscription apps soared by 34% YoY, going from $9.7 billion to $13 billion. The total revenue from these apps accounted for an 11.7% share of the $111 billion spent on in-app purchases during the year.

In the US, consumer spending on these apps rose by 26% YoY from $4.6 billion in 2019 to $5.9 billion in 2020. They accounted for a 17.6% share of the total $33 billion that consumers spent on in-app purchases.

On the App Store, consumers spent a total of $10.3 billion on the top 100 subscription apps. That marked a 32% increase from the 2019 total of $7.8 billion. Play Store posted higher growth at 42%, going from $1.9 billion in 2019 to $2.7 billion in 2020.