YouTube is “closing the gap” between Shorts and long-form monetization

YouTube executives say the platform saw “healthy” growth in watch time and “strong” growth in subscriptions in Q2 2024, which in turn helped drive its ad revenue to $8.66 billion for the quarter–a 13% jump year over year from the $7.7 billion it made in Q2 2023.

Ruth Porat, in her final call to investors as she steps down as CFO to become Alphabet‘s President and Chief Investment Officer, also attributed growth to the fact that YouTube is “continu[ing] to close the monetization gap with Shorts.” It began running ads on Shorts a little over a year ago–and in that year, views on Shorts more than doubled, Alphabet/Google CEO Sundar Pichai said.

Turning Shorts into a revenue center is a major change from just a couple years ago, when the amount of viewership it soaked up was actively damaging YouTube’s ad earnings. At the time, around Q1 and Q2 of 2022, more people were beginning to spend their time watching Shorts (which, again, weren’t monetized) instead of long-form, and thus long-form ad revenue was suffering.

But after YouTube introduced monetization for Shorts on Feb. 1, 2023, it’s seen consistent growth in ad revenue quarter over quarter, with a biggest-earnings-ever spike in Q4 2023 for the holiday ad rush.

Here’s a look at YouTube’s last two years of ad earnings:

• Q2 2022: $7.34 billion
• Q3 2022: $7.07 billion
• Q4 2022: $7.96 billion
• Q1 2023: $6.69 billion
• Q2 2023: $7.7 billion
• Q3 2023: $7.9 billion
• Q4 2023: $9.2 billion
• Q1 2024: $8.1 billion
• Q2 2024: $8.66 billion

Alphabet SVP/Chief Business Officer Philipp Schindler said the “improvement” YouTube is seeing in Shorts monetization is “particularly in the U.S.”

Though YouTube says it’s closing the gap between Shorts and long-form it didn’t provide any specific numbers for how much revenue the two are generating separately. It also didn’t give any specific figures for its increase in watch time, and while Schindler said Alphabet’s subscriptions sector grew 14% quarter over quarter, “driven again by strong YouTube subscriptions,” he didn’t say what figure that 14% improved upon.

Porat added too that YouTube is seeing “continued momentum in connected TV, with brands benefiting in part from an ongoing shift in budgets from linear television to digital.” But, again, no specific figure. (Though we’re sure Neal Mohan is happy to hear YouTube continues to be traditional TV’s biggest watch time challenger. Sorry, Netflix.)

And despite all that growth (Porat outright said that “In YouTube, we are pleased with the growth in the quarter”), the platform missed analysts’ projections of $8.9 billion, resulting in a 4.6% drop in Alphabet’s share prices post-earnings call. Alphabet’s total revenue for the quarter was $84.7 billion, up 14% year over year, and earnings per share hit $1.89. Both those numbers were above analyst projections.