YouTube Ad Revenue Forecast To Rise 4%, Hit $30.4B, In 2023

Advertising revenue across all YouTube platforms, including YouTube TV, should see growth of 4% this year, to $30.4 billion and growth of 10.3% to $33.5 billion, in 2024, according to new WARC projections.

While relatively modest, 2023’s growth will represent a turnaround from Q4 2022, when YouTube’s ad revenue dropped 8.8%, as marketers shifted investment to search, retail media, TikTok, and Instagram Reels.

“It’s been a tricky 12-month period for YouTube, which is increasingly battling against short-form video platforms like TikTok as well as long-form content streamers in the connected TV space,” says Alex Brownsell, WAR Media head of content. “However, as trading conditions improve in digital advertising, YouTube can expect to see revenue growth improve.”

YouTube is prioritizing its 60-seconds-or-under Shorts format and connected TV engagement, and innovating with unskippable 30-second ads and “pause experiences” on TV to help marketers engage audiences across screens and achieve performance- and brand-building goals.

YouTube Shorts are offering more opportunities for marketers to reach new audiences, but its 50-billion daily viewer total is still significantly behind Instagram Reels’ 140 billion. In addition, users under 18 spend 60% longer on TikTok than on YouTube content, on average.

Retail -- YouTube’s largest ad category -- is projected to see 4.6% growth this year, to $4.1 billion.

Growth in other categories has been harder to achieve, although technology and electronics and toiletries and cosmetics are forecast to see 13.9% and 12.1% gains this year, respectively.

YouTube reaches half of all internet users globally, including 2.07 billion adults — twice as large as TikTok and Instagram — and logs more than 1 billion hours of video watching per day.  

YouTube has overtaken Netflix as the largest TV streaming platform in the U.S., accounting for 22.9% of OTT viewing in March 2023, according to Nielsen. It is also the most popular channel for U.S. Gen Zs for consuming sports news, and last year was the most popular platform for both music and podcast listening in the U.S.

APAC is a key growth region for YouTube, and in Latin America, it delivers brand impact more cost-effectively than any other video platform, according to Kantar research.

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