Google’s parent Alphabet reported strong Q4 ’15 earnings late yesterday, with $21.4 billion in revenue (up 18% vs. Q4 ’14) and operating income of $5.4 billion (up 22% vs. Q4 ’14). On the earnings call, Alphabet CFO Ruth Porat and Google CEO Sundar Pichai repeatedly cited YouTube as one of the key contributors to the company’s very successful quarter.
But as usual, there were few specifics of YouTube’s actual financial performance disclosed, with Porat only saying “YouTube revenue continues to grow at a very significant rate” primarily due to the TrueView skippable ad unit.
Pichai characterized YouTube as a “must-have for all brand advertisers” with YouTube reaching “more 18 to 49-year-olds” than any cable network in the U.S.” Unfortunately, no new actual viewership data was revealed, with Pichai once again saying that users watch hundreds of millions of hours per day on YouTube, with 80% of viewership outside the U.S. One new nugget was was that time spent watching YouTube in the living room more than doubled in 2015 (again no detailed data shared).
On the revenue side, Pichai added that YouTube is working hard on helping advertisers better understand the effectiveness of their spending on YouTube with expanded measurement tools and recently introduced support for third-party viewability vendors. Pichai said that the number of small and medium-sized businesses (a staple of Google’s AdWords’ success) advertising on YouTube has doubled in the past two years.
But Porat noted that YouTube’s “monetization story is still evolving” and that it’s still “early innings” for moving offline (i.e. TV) budgets to YouTube.
Pichai also added bullish comments about the role of programmatic video with impressions doubling in the 2015 holiday season vs. in 2014. He also said that 60% of programmatic video impressions in the week leading up to Black Friday were on mobile.
Finally, Pichai made a number of optimistic comments about YouTube Red, virtual reality, YouTube Music and YouTube Originals, again, all without citing any metrics on progress. All of these are still relatively nascent efforts, and given Google’s recent track record of killing off projects that aren’t working, all could be vulnerable. There’s no question that YouTube remains the 800-pound gorilla of the online/mobile video industry but it sure would be nice for the company to share more specifics on how it’s actually doing.