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There’s not much we can agree on in this world of strife and tears, but there is one opinion that’s just about universal: YouTube ads suck. Want to watch a video? Watch this ad first. Want to watch another video? Watch this longer ad! Can you click past the ad before it’s over? Maybe—pay close attention to find out. As for ad blockers, YouTube is doing its best to make those more hassle than they’re worth. It’s obnoxious as hell, and it sucks.
Given how offputting and utterly detrimental to the experience its ads are, you might fairly wonder why YouTube keeps shovelling them on. Why does it work so hard to make YouTube worse? The answer is very simple: Those hated YouTube ads make, as they say in the Canadian scientific community, a metric ass-ton of cash.
Alphabet’s Q4 financial results (via Variety) reveals that YouTube ads raked in more than $10.4 billion in the quarter—to be clear, that’s 10 billion smackers in just three months. That’s a relatively small slice of the total Alphabet pie, which topped $96 billion (again, in three months), but it’s a staggering amount of money for three months of ads on the ‘Tubes. It’s also a new record, marking a 14% increase over YouTube’s advertising revenue in Q4 2023, which hit $9.2 billion.
In its earnings call, Alphabet CEO Sundar Pichai attributed much of that jump to the US election, which took place on November 5, 2024. Combined spending on YouTube ads by the Democratic and Republican parties was almost double what they spent in the 2020 elections, and more than 45 million people watched “election-related content on YouTube” on election day alone.
It’s possible to dodge the deluge of ads, of course, by signing up for the YouTube Premium subscription service. That goes for $14 per month or $140 per year, which strikes me as an exorbitant amount of money for, y’know, YouTube. It’ll be a cold day in hell before I throw that kind of money at, again, YouTube, but at least a few of my compatriots here at PC Gamer—like associate editor Ted Litchfield—do pony up for it, and I’m ashamed to say they all claim it’s worth it.
They’re not alone in that assessment, because it’s raking in the green too. YouTube subscription revenues aren’t reported separately but are instead rolled into “Google subscriptions, platforms, and devices,” but that’s up year-over-year as well, from $10.8 billion in Q4 2023 to $11.6 billion over the same period in 2024. Alphabet chief financial officer Anat Ashkenazi said during the earnings call that “we continue to have significant growth in our subscription products, primarily due to increase in the number of paid subscribers across YouTube TV, YouTube Music Premium and Google One.” YouTube TV, for the record, is a separate streaming service, unrelated to YouTube Premium, that starts at $83 per month.
Oh, but don’t worry, because it’ll probably get worse. “We believe that AI will revolutionize every part of the marketing value chain and, over the past quarter, we’ve seen how our customers are increasingly focusing on optimizing their use of AI,” chief business officer Philipp Schindler said. “As an example, Petco used Demand Gen campaigns across targeting, creative generation, and bidding to find new pet parent audiences across YouTube. They achieved a 275% higher return on ad spend and a 74% higher click through rate than their social benchmarks.”
Schindler said later that, based on Nielsen analysis, “Google AI-powered video campaigns on YouTube deliver 17% higher return on advertising spend than manual campaigns.”
So there you have it: Everyone hates YouTube ads but they make a mint, so we’re stuck with them and can probably expect them to burrow even deeper into our psyches in the future unless you’re willing to spend 14 bucks every month to make them go away. Maybe that’s not such a terrible price to pay after all.
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Kurt Indovina
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