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Facebook And Google Go Granular With Recent Ad Revenue Reporting

February 19, 2020 Sarah Cavill

shutterstock_740189872  Kiev, Ukraine - March 03, 2017: YouTube and Instagram round icons printed on paper and pinned on cork bulletin board

The recent release, by Facebook and Google, of 2019 revenues for subsidiaries Instagram and YouTube were firsts for the tech giants, and very revealing for a variety of reasons.

The Instagram app fetched $20 billion in advertising revenue in 2019, and video monolith YouTube, $15.1 billion.

The Success Of Instagram Is Important For Facebook

The last several years have been a roller coaster for Facebook, including an ongoing antitrust investigation by the Department of Justice, tweaks and adjustments to ad platforms as Facebook reckons with privacy and veracity issues and chatter about relevancy given the waning interest in Facebook from Gen Z. It comes as no surprise the somewhat beleaguered brand is touting the success of Instagram, particularly as Facebook moves to unify apps, branding them as a “family of apps.”

Facebook’s apps, including WhatsApp and Instagram, are being rebranded “WhatsApp from Facebook” and “Instagram from Facebook.” Meanwhile, Facebook teams have taken over Instagram and WhatsApp, tasked with creating a more cohesive brand — and undoubtedly hoping to add a little shine to Facebook. Insiders question the move, noting Instagram and WhatsApp are scandal-free and may be better left alone, especially since only slightly more than a quarter of Americans know Facebook owns Instagram and WhatsApp.

Although Facebook declined to comment about Instagram’s 2019 haul, it’s clear the social media platform intends to rely more heavily on the once humble photo-sharing app, both for goodwill and for revenue. Facebook intends to increase the amount of advertisements in the regular Instagram timeline, stories and Instagram’s popular Explore tab. The acquisition of Instagram for $1 billion in 2012 could be the best decision Facebook ever made.

shutterstock_1018468075  Singapore.February, 2018:A Woman holding iPhone with video service YouTube on the screen. iPhone was created and developed by the Apple inc.

YouTube Revenues Boost Google’s Off-Revenue 2019

Google has never disclosed the revenue from YouTube, and there has been much curiosity within the industry about the role YouTube plays in the Google universe. YouTube is a massively popular platform, with more than 2 billion users logging on monthly and 500 hours of footage uploaded every minute.

When Google bought YouTube in 2006, search and video became intrinsically linked — connections became more relevant as users and brands grew more comfortable with video. Users may search for the best tires on Google, but they turn to YouTube for videos about how to change a tire, and brands leverage affinity audiences and users’ habits to cross pollinate across platforms. Additionally, ads created for YouTube can also be shared across Google video partners. This symbiotic relationship, and Google’s reluctance to share YouTube’s revenue, has led to speculation about how much YouTube actually makes for Google.

According to a February article in Bloomberg, “Alphabet’s [Google’s parent company] YouTube ad sales report yesterday added clarity on the business after years of speculation, but the number was ultimately disappointing for analysts who expected greater rewards for Google from consumers’ shift to watching videos online.”

Interestingly, despite the percentage of revenue YouTube brings to Google being somewhat unsatisfactory, it’s likely Google revealed the stats for the first time to make Google’s own 2019 revenues look stronger. (Google had a great year for profit, but missed on revenues.) An article about the YouTube revenue disclosure in Verge, notes, “To appease investors, it’s important for Google to remind onlookers that its business isn’t solely dependent on its search engine, and that it has fast-growing and separate businesses like YouTube and its cloud computing division to pick up the slack.”

Brands Must Continue To Create Multiplatform Campaigns Inclusive Of Instagram And YouTube

These revenue disclosures by industry giants Facebook and Google are yet another indication that audiences are diversifying their time spent online. Brands that want to stay relevant and top of mind should be creating strategic, multiplatform campaigns to attract and engage audiences. Effectively targeted, omnichannel strategies that include social media and video are becoming increasingly important in the ever-evolving digital marketplace.

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Senior Marketing Communications Writer, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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