By David George, CEO, Pixability
YouTube is the new king of media. This is how media research firm MoffettNathanson described the platform in a recent report about how YouTube is poised to outpace Disney in revenue and it’s hard to dispute when you look at the numbers. YouTube reaches 250 million viewers in the U.S., more than any other platform—on mobile, on desktop, and now in the living room via Connected TV (CTV). It dominates watch time across every screen, and every demographic. And it’s not just entertainment—it’s search, commerce, community, and utility. So, while YouTube generated an incredibly healthy $54B in revenue last fiscal year ($36B of which was from advertising), could that number potentially be much bigger?
The answer lies in what is currently a fundamental disconnect between audience behavior and advertising investment.
Consumers are spending more time than ever on YouTube across formats—whether it’s watching long-form content on their living room screens, engaging with Shorts on mobile, searching for product reviews, or following their favorite creators. In fact, US consumers spend more time with YouTube on TV screens than any other CTV platform according to Nielsen Gauge – more than Netflix, Hulu, Prime or any other streaming service. For every 100 minutes of time US consumers spend on TV, 12 minutes of it is on YouTube. But ad dollars haven’t kept pace. YouTube has the reach, engagement, and performance to command significantly more marketer investment than it’s getting today–so why isn’t it? According to eMarketer, it’s No.1 in reach but No.10 in ad spend worldwide.
The culprit isn’t actually the platform—it’s the process that surrounds it.
YouTube has evolved into a multidimensional media environment. It’s not just one distribution channel—it’s many. You can buy YouTube as a stand-alone video platform, as a CTV streaming channel, or as a social video player. With Demand Gen and other performance-focused offerings, YouTube is also now increasingly being used as a lower-funnel engine. It can also be a core platform for creator programs and has attracted significant investment in organic branded content. The platform now flexes across brand and performance, upper-funnel and direct response, TV and social.
Yet larger media agencies continue to approach YouTube through siloed teams that sometimes fight for the right to spend on the platform. YouTube budgets may live within a video team that doesn’t include CTV; in the CTV group itself; or the social media group. This fragmented approach often means that only one of those teams is focused on YouTube while, to avoid duplication, the others are not, preventing the full utility of YouTube from being realized. For example, a recent survey of media agencies found that only 29% of agencies run YouTube through their CTV and TV teams, a far smaller percentage than would be expected for the No. 1 CTV platform in terms of reach. However, agencies predict that number will rise to 40% in the near future, which should have a significant impact on YouTube investment. If YouTube becomes a bigger part of CTV planning, that could mean billions more in ad revenue from the fastest growing segment of advertising.
A potentially larger oversight is YouTube not being included in many social campaigns. Social teams at the biggest agencies often don’t have YouTube in their purview, because another team at the agency is already managing it. This was more reasonable prior to YouTube Shorts but now Google’s vertical short-form service represents a reach bigger than TikTok, with many of the same capabilities. Consider that eMarketer identifies the top social platforms in terms of revenue as Facebook, Instagram, TikTok, LinkedIn, Pinterest, Snapchat, X and Reddit with no mention of YouTube. If YouTube Shorts were a standalone social platform (and agency social teams didn’t have to fight for budget for it from other internal teams), arguably it could approach TikTok’s $14B/year in revenue–especially given the swirl of controversy surrounding the ByteDance-owned company.
The future of media buying demands integration. YouTube should no longer be thought of as one platform owned by one team at an agency, but rather as multiple platforms that multiple teams should leverage, with the help of a unified system to prevent duplication. A few agencies are doing this now but the biggest agencies have proven slowest to adapt and to embrace audiences where they are today. Adopting this approach could easily add billions to YouTube marketing budgets, far beyond what analyst firms are predicting for YouTube.
YouTube isn’t falling short on investment on its own accord. It’s just being under leveraged by systems that were built for a different era of media. When those systems evolve, YouTube’s true value will finally be unlocked—and perhaps a $100B ad revenue year will be within reach. Fix the buying model, and the market will finally see the platform for what it truly is: one of the most powerful–and undervalued–media businesses ever.