YouTube Ads Estimated To Contribute $8.95B In Q4 2021 Revenue

As earnings season for Q4 2021 gets underway, Raymond James Analyst Aaron Kessler released a research note early Thursday with ad industry estimates focused on search, social and advertising technology. Based on industry data and check-ins with various companies, the analyst firm estimates solid online advertising growth across the three sectors in fourth-quarter 2021.

While search and social advertising remains strong, expect slow growth for both when companies report Q4 2021 earnings. Raymond James data estimates Google will report 31% growth year-over-year (YoY) in Q4 2021 when it reports earnings February 1, down from 44% in third-quarter 2021. Look for strength in search, video, and cloud services.

Estimates suggest YouTube ads will contribute about $8.95 billion in revenue for the quarter -- up 30% YoY. Google Network sites should rise 14% YoY to $8.15 billion, and Google Cloud revenue should reach $5.44 billion. The Google Other segment, driven by Google Play and hardware sales, should rise 27% YoY to $8.48 billion.

Data from Skai, formerly Kenshoo, which Kessler mentioned in the report, shows that paid-search advertising spend overall rose 23% YoY in Q4 2021 -- down from 32% in Q3 and 60% in Q2 2021. Monthly spend trends remained strong with growth of 22% YoY in October, 28% in November and 19% in December, respectively.

Raymond James estimates Meta, Facebook’s parent -- which reports Q4 2021 earnings on February 2 -- will show advertising growth of 19% YoY vs. 33% YoY in the prior quarter.

The focus, for Facebook Ads, remains on the disruption caused by Apple’s random identifier for advertisers (IDFA), but Kessler wrote that the company’s management expects to cut IDFA impacts in half by the end of 2022 and plans longer–term fixes for the remaining impact.

Skai also shows that total social ad spend rose 14% YoY in Q4 2021 vs. 26% YoY in the prior quarter. Spend growth was driven by pricing, with impressions falling 8% YoY vs. 6 YoY in 3Q, respectively. CPMs rose 22% YoY in Q4 2021 vs. 34% YoY in Q3, while product ads drove increases in CPMs.

Skai’s data comes from about $7 billion in advertising spend, more than 3,000 advertiser and agency accounts across 40 vertical industries and more than 150 countries running on the Skai platform across Google, Microsoft, Baidu, Yandex, Yahoo Japan, Verizon Media, Amazon, Walmart, Instacart, Criteo, Apple Search Ads, Pinterest, Snapchat, Facebook, Instagram and the Facebook Audience Network.

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