youtube-vs-tiktok

YouTube vs. TikTok

In 2022, YouTube generated over $29 billion in revenue, in ads, compared to TikTok’s $11 billion. However, TikTok is growing quickly, from $4.6 billion in 2021, while YouTube’s growth has stalled, as it generated almost $29 billion in ad revenue in 2021.

Both companies can be considered the most popular video social/entertainment media.

Indeed, YouTube started as a video search engine, acquired by Google in 2006, and it was successfully integrated into Google’s business model.

how-does-youtube-make-money
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it reported more than $29B in revenues by 2022. YouTube also makes money with its paid memberships and premium content.

In fact, by 2022, YouTube generated nearly $30 billion in ad revenue. And it’s one of the main products within Google.

google-advertising-revenue
While Google has been rebranded as Alphabet, back in 2015, in reality, the company still primarily makes money from advertising. Indeed, in 2022, Alphabet generated over $162 billion from Google searches, $32 billion from Google Network members, and over $29 billion from YouTube ads. In total, Google made over $224 billion in advertising revenue from Search, Network members, and YouTube Ads combined. This represented almost 80% of Alphabet’s total revenue. Instead, Google search represented over 57% of its total revenues.

On the other hand, TikTok has been a successful social media platform launched in the last five years.

The company managed to create a whole new concept of social media, which, compared to Facebook and Instagram, moved beyond the social graph.

It worked purely through a recommendation engine that enabled users to discover sticky content worldwide through its AI-based feed.

tiktok-business-model
TikTok makes money through advertising. It is estimated that ByteDance, its owner, made $51 billion in 2021 in revenues. TikTok instead generated $11 billion in advertising in 2022, 3.3 billion downloads, and 1.2 billion monthly active users in 2021. TikTok, therefore, is a multi-billion company worth anywhere between $100 and-150 billion and among the most valuable social media platforms on earth.

YouTube and TikTok are in direct competition, as YouTube has successfully transitioned into an entertainment platform where short-form video content is among its main features.

In addition, YouTube is now successfully integrating that short-form video content into its advertising machine, thus making it possible for Google to monetize it.

Business Model ElementYouTubeTikTokSimilaritiesDifferencesCompetitive Advantage
Customer SegmentsContent creators, viewers, advertisersContent creators, viewers, advertisersBoth platforms target content creators, viewers, and advertisers.YouTube’s established presence with a wide range of content. TikTok’s focus on short-form, user-generated content.Vast Content Library (YouTube), Short-Form Video Dominance (TikTok).
Value PropositionAccess to diverse content, monetization opportunities, advertising reachShort-form, user-generated content, virality, music integrationBoth emphasize access to content and monetization opportunities. YouTube offers a vast library of diverse content. TikTok’s value lies in short, engaging videos and music integration.YouTube’s long-form and varied content offerings. TikTok’s unique focus on short-form videos and virality.Diverse Content Library (YouTube), Viral Short-Form Content (TikTok).
ChannelsWebsite, mobile app, Smart TVs, gaming consolesMobile appBoth operate through website and mobile app channels. YouTube is accessible on various platforms, including Smart TVs and gaming consoles. TikTok primarily operates through its mobile app.YouTube’s multi-platform availability. TikTok’s mobile app-centric approach.Multi-Platform Accessibility (YouTube), Mobile App Focus (TikTok).
Customer RelationshipsContent creators, viewers, advertisersContent creators, viewers, advertisersBoth platforms maintain relationships with content creators, viewers, and advertisers.YouTube’s established relationships with long-standing content creators. TikTok’s focus on fostering a community of short-form content creators.Established Content Creator Relationships (YouTube), Short-Form Content Community (TikTok).
Key ActivitiesContent hosting, ad serving, analyticsContent hosting, algorithm development, viralityBoth engage in content hosting. YouTube focuses on ad serving and analytics. TikTok emphasizes algorithm development to promote virality.YouTube’s emphasis on analytics and a wide range of content. TikTok’s focus on algorithmic content discovery and short-form video promotion.Analytics and Monetization (YouTube), Algorithmic Virality (TikTok).
Key ResourcesContent library, data centers, ad platformContent library, recommendation algorithmBoth rely on content libraries. YouTube has data centers and an extensive ad platform. TikTok’s key resource is its recommendation algorithm.YouTube’s extensive data centers and well-established ad platform. TikTok’s innovative recommendation algorithm for content discovery.Data Centers and Ad Platform (YouTube), Recommendation Algorithm (TikTok).
Key PartnershipsContent creators, advertisers, music labelsContent creators, advertisersBoth collaborate with content creators and advertisers. YouTube partners with music labels for licensed content.YouTube’s partnerships with music labels and established content creators. TikTok’s focus on partnerships with emerging content creators and viral trends.Music Label Partnerships (YouTube), Viral Trend Partnerships (TikTok).
Revenue StreamsAdvertising, YouTube Premium subscription, Super Chat, merchandise shelfAdvertising, TikTok Coins, brand partnershipsBoth platforms generate revenue through advertising. YouTube has additional revenue streams, including subscription services and merchandise. TikTok’s revenue includes TikTok Coins and brand partnerships.YouTube’s diversified revenue streams beyond advertising. TikTok’s reliance on advertising and in-app purchases through TikTok Coins.Diversified Revenue Streams (YouTube), In-App Purchase Focus (TikTok).
Cost StructureContent storage and delivery costs, advertising infrastructure, content acquisitionContent hosting and recommendation algorithm maintenanceBoth platforms have costs related to content storage and delivery. YouTube’s cost structure includes content acquisition and advertising infrastructure. TikTok’s costs primarily revolve around content hosting and algorithm maintenance.YouTube’s higher content acquisition and advertising infrastructure costs. TikTok’s cost focus on algorithmic content recommendations and user engagement.Content Acquisition Costs (YouTube), Algorithm Maintenance Focus (TikTok).

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Google Business Model

google-business-model
Google is an attention merchant that – in 2022 – generated over $224 billion (almost 80% of revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.2 billion).

Google Other Bets

google-other-bets
Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. 

Google Cloud Business

google-cloud-business-model

How Big Is Google?

how-big-is-google
Google is an attention merchant that – in 2022 – generated $224 billion (almost 80% of its total revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.3 billion).

Google Traffic Acquisition Costs

traffic-acquisition-cost
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, to keep it stable. In 2022 Google spent 21.75% of its total advertising revenues (over $48 billion) to guarantee its traffic on several desktop and mobile devices across the web.

How Does Google Make Money

google-revenue-breakdown
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).

YouTube Business Model

how-does-youtube-make-money
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it reported more than $29B in revenues by 2022. YouTube also makes money with its paid memberships and premium content.

Google vs. Bing

google-vs-bing

Google Profits

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Google Revenue Breakdown

google-revenue
In 2022, Google generated over $282 billion in revenues, of which over $162 billion from Google Search, over $29 billion from YouTube Ads, and almost $33 billion from Network Members’ properties. In addition, Google generated over $29 billion in other revenue, over $26 billion from Google Cloud, and over a billion dollars from other bets.

Google Advertising Revenue

how-much-money-does-google-make-from-search

Apple vs. Google

apple-vs-google

Google Employees Number

google-employees-number

Google Ad vs. Facebook Ad

google-ad-vs-facebook-ad

YouTube Ad Revenue

youtube-ad-revenue
YouTube, by 2022, generated over $29 billion in advertising revenues.

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