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YouTube's ad revenue growth slows down in Q2, subscription revenue sees good growth

The ad market saw a modest improvement in July

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KOLKATA: In the pandemic-hit period, Google-owned YouTube’s advertising revenue declined in the Q2 of 2020 compared to the previous quarter. It has raked $3.81 billion for the quarter up from $3.60 billion in the year-ago period but lower than $4.04 billion in Q1. 

“For YouTube, we ended March with a year-on-year growth rate in the high single digits, and that's reflecting a substantial headwind from brand. The headwind from brand moderated modestly at the end of the second quarter, and then we saw a further improvement in July. Direct response has been consistently strong,” Google and Alphabet CFO Ruth Porat said.

Google and Alphabet CEO Sundar Pichai also mentioned strong growth in non-ads revenues particularly from Cloud, Google Play and YouTube subscriptions. Nevertheless, content acquisition costs of the company were primarily driven by content costs for YouTube TV and paid YouTube Music and premium subscription services. 

He also added that YouTube Premium Music and TV subscriptions performed well during the quarter. “This, in turn, is helping our partners, developers and creators earn revenue and deliver valuable services to people. We are focused on the steps to build long-term value with these opportunities,” Pichai said.

However, while the ad market saw a bump since March, the headwind from brand moderated modestly at the end of the second quarter seeing further improvement in July. Moreover, the company added features in the quarter to make video ads more easily shoppable and browsable on YouTube as more businesses are shifting to online to offset physical store closures. 

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