youtube-advertising-machine

YouTube Advertising Cash Machine Is An Over 15 Billion Business In 2019

youtube-advertising-machine
YouTube Advertising Machine Is Worth More Than $15B In 2019 Founded in 2005 by former PayPal co-workers (Chad Hurley, Eric Skaggs, Jawed Karim, Martin Pauer, and Steve Chen) YouTube was acquired for almost $1.7 billion in 2006 by Google. YouTube Ads is a $15 billion advertising business as of 2019. ADVERTISING PAID MEMBERSHIP As part of Google (Alphabet), YouTube contributes to Google advertising revenues. Advertising is the primary driver of Alphabet’s Google’s revenue, and it added over $15B.

As Alphabet’s CEO, Sundar Pichai highlighted in its press release:

“Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet…I’m really pleased with our continued progress in Search and in building two of our newer growth areas — YouTube, already at $15 billion in annual ad revenue, and Cloud, which is now on a $10 billion revenue run rate…In 2019 we again delivered strong revenue growth, with revenues of $162 billion, up 18% year over year and up 20% on a constant currency basis…To provide further insight into our business and the opportunities ahead, we’re now disclosing our revenue on a more granular basis, including for Search, YouTube ads and Cloud.”

asymmetric-business-models
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
google-advertising-business
Google generated over $116 billion from advertising revenues in 2018, which represented 85% of its total revenues. Of those revenues over 70% came from traffic via Google’s main properties (Google search engine, YouTube, Gmail, and others). Google’s main properties are monetized primarily via a cost-per-click mechanism. Network members’ sites are primarily monetized on a cost-per-impression basis. Google also spent over $26 billion in 2018 to sustain its traffic on both its properties and as a revenue-share mechanism with its network members (AdSense and AdMob).
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Gennaro Cuofano

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