Alphabet, Google’s parent company, just released YouTube and Google advertising revenue for the fourth quarter of 2019, as well as 2019 net revenue. Net sales for all Alphabet products in 2019 are estimated at $162 billion. Total Google advertising revenue for 2019 is $134.8 billion, while YouTube generated $15 billion in 2019.
Alphabet’s annual profit beat analysts’ expectations, although fourth-quarter revenue came in below estimates. In the fourth quarter, Alphabet had net sales of $46.07 billion, which is about $870 million less than forecast fourth-quarter sales.
Alphabet also announced that its cloud service is worth $10 billion.
Comparison of advertising revenue in 2019
Source: Company earnings reports
In terms of advertising spending, Google, Facebook and Amazon are the three largest digital platforms. It is noteworthy that Google’s net revenue in 2019 is almost twice that of the Facebook advertising service, which is about $70 billion. Amazon, the third-largest digital advertising platform, trailed YouTube by about $900 million in 2019 revenue.
What it means for internet marketers
Digital advertising spending is increasing
While Alphabet may have had a hard time hitting its Q4 2019 forecast numbers, there’s no denying that digital ad spending continues to rise in 2019. Furthermore, this trend will continue in 2020.
Traditional advertising spending is declining
It’s worth noting that YouTube now generates more revenue than traditional US media channels such as newspapers, consumer magazines, trade magazines, out-of-home, Yellow Pages and more.
Google is committed to improving its ad policies
We have seen Facebook heavily criticized for profiting from disinformation and misleading advertising. To avoid similar accusations, Google recently published one policy for handling rejection on its advertising platforms such as YouTube. In the company’s own words, it has “developed policies that prohibit deceptive practices and abuses such as voter suppression and misrepresentation in our products, including Google Ads, YouTube or Google Play.”
This is the first time in 15 years that Alphabet has disclosed YouTube advertising revenue
What’s interesting is that Alphabet is disclosing YouTube’s advertising revenue for the first time since it acquired YouTube in 2006 for $1.65 billion. It’s amazing to see the growth YouTube has experienced as part of Google over the last decade and a half, becoming a $15 billion a year company.
YouTube generates a fifth of Facebook’s advertising revenue and is six times larger than Amazon’s Twitch
When it comes to video platforms, YouTube and Facebook are actively competing with each other. Although this ratio could change in the future, YouTube generated about a fifth of Facebook’s advertising revenue in 2019.
At the same time, YouTube generated about six times the revenue of Amazon’s live video streaming service called Twitch.
In a separate announcement, Google announced that YouTube’s Premium (ad-free) and Music Premium services now have more than 20 million subscribers. The company also had two million subscribers to its pay television service.
Alphabet bundled sales from these products in the “Other” category, which brought in a net $5.3 billion in the fourth quarter.
YouTube’s own phenomenal growth revealed
If we compare YouTube’s growth in the first three quarters to that of the fourth quarter, we get a glimpse of YouTube’s phenomenal growth. Of the $15 billion in revenue in 2019, the platform collected $10 billion in the first three quarters, while revenue in the fourth quarter alone is $5 billion.
Use the power of digital marketing and advertising to grow your business. Reach First is a premium digital marketing company based in Edmonton, offering lead generation through Google PPC ads and Facebook paid ads to clients from all parts of Canada. Other services we offer include website design and development, SEO and SMO. Contact Reach First today to discuss your marketing needs.